The Make in India initiative has transformed India’s manufacturing capabilities across various domains and verticals. However, the chemical sector is still lagging with a fiscal deficit of around $31 billion in 2023. According to a report by the NITI Aayog of India, the country aims to develop a $1 trillion chemical sector through fiscal and non-fiscal interventions, enabling it to achieve a 12% Global Value Chain (GVC) share by 2040.
NITI Aayog has introduced various measures to boost the chemical sector. Among the measures are the operational expenditure Subsidy Schemes, expedited environmental clearances, more free trade agreements, the development of world-class chemical hubs, and an emphasis on improving technologies to promote self-reliance and bleeding-edge innovation.
This is important because India’s current share in the GVS is only 3.5%, with a trade deficit exceeding $31 billion. This means India is a heavy importer of specialty chemicals and has a high dependence on the global supply chains.
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The global supply chain is undergoing significant changes driven by shifting supply chains, changing geopolitical conditions, the demand for specialty and green chemicals, and a heightened focus on innovation and sustainability. India’s chemical sector, although a formidable force, remains fragmented and lacks adequate infrastructure and research and development (R&D) capabilities. In 2023, the Indian chemical market was valued at a respectable $220 billion. However, the country plans to increase it to $400 to $450 billion by 2030 and to approximately $850 to $1000 billion by 2040.
