While India's chemicals industry already stands as the world's sixth-largest producer, powering 7% of the nation's manufacturing and employing millions, the journey from its current colossal USD 220 billion size to a projected USD 400 billion behemoth by 2040 is paved with both staggering achievements and untapped potential waiting to be unlocked.
Key Takeaways
- India's chemicals and petrochemicals industry contributed 7% to the country's total manufacturing output in FY2023.
- The Indian chemicals sector is the 6th largest in the world and 3rd largest in Asia in terms of production volume as of 2023.
- Total chemicals production in India stood at 108 million tonnes (MT) during FY2022.
- Petrochemicals production in India reached 15.2 MT in FY2023, up 12% YoY.
- Caustic soda production capacity stood at 5.2 million tonnes per annum (MTPA) as of March 2023.
- India's PVC production was 2.8 MT in FY2023, with capacity utilisation at 85%.
- India's chemical exports reached USD 24 billion in FY2023.
- Chemical imports stood at USD 28.5 billion in FY2023, with a trade deficit of USD 4.5 billion.
- Organic chemicals exports grew 18% YoY to USD 12.3 billion in FY2023.
- The Indian chemicals industry market size was USD 220 billion in FY2023.
- Revenue growth of chemicals sector was 14.5% YoY in FY2023.
- EBITDA margins for top chemical companies averaged 18% in FY2023.
- Investments worth INR 1.5 lakh crore approved under PLI scheme for chemicals by 2023.
- Government announced USD 2.5 billion incentives for bulk drug parks in 2023.
- PLI scheme attracted 48 projects worth INR 85,000 crore in chemicals by mid-2024.
India's large and fast-growing chemical industry is a major manufacturing and export powerhouse.
Financial Metrics
- The Indian chemicals industry market size was USD 220 billion in FY2023.
- Revenue growth of chemicals sector was 14.5% YoY in FY2023.
- EBITDA margins for top chemical companies averaged 18% in FY2023.
- Total investments in chemicals sector reached USD 15 billion in FY2023.
- Net profit of listed chemical firms rose 25% to INR 45,000 crore in FY2023.
- Debt-to-equity ratio in chemicals industry improved to 0.65 in FY2023.
- R&D expenditure by chemicals industry was 1.2% of revenue in 2023.
- Market cap of top 10 chemical companies exceeded USD 100 billion in 2024.
- Average ROE for chemical firms was 22% in FY2023.
- Specialty chemicals segment revenue hit USD 42 billion in FY2023, 20% growth.
- Paint industry turnover reached INR 70,000 crore in FY2023.
- Agrochem firms' revenue grew 16% to USD 12 billion in FY2023.
- Petrochem revenue stood at USD 80 billion, 18% YoY increase in FY2023.
Financial Metrics Interpretation
The Indian chemicals industry isn't just bubbling with potential; it's in full, profitable eruption, boasting surging profits, robust investments, and healthier balance sheets, yet it's still somewhat stingy when it comes to funding its own future through R&D.
Industry Overview
- India's chemicals and petrochemicals industry contributed 7% to the country's total manufacturing output in FY2023.
- The Indian chemicals sector is the 6th largest in the world and 3rd largest in Asia in terms of production volume as of 2023.
- Total chemicals production in India stood at 108 million tonnes (MT) during FY2022.
- The organised segment accounts for 65% of the total Indian chemicals market valued at USD 178 billion in 2022.
- India's chemicals industry employs over 2.5 million people directly and indirectly as per 2023 estimates.
- Per capita chemicals consumption in India is 8.5 kg, significantly lower than the global average of 25 kg in 2022.
- The dyes and pigments segment constitutes 3% of global production with India holding 16% market share in 2023.
- India's share in global chemicals production is expected to rise from 3.5% in 2022 to 7% by 2040.
- The industry witnessed a CAGR of 9.34% in production from FY2018 to FY2023.
- Bulk chemicals dominate with 62% share in total production volume in FY2023.
- India's chemicals industry contributed 7% to the country's total manufacturing output in FY2023.
- The Indian chemicals sector is the 6th largest in the world and 3rd largest in Asia in terms of production volume as of 2023.
- Total chemicals production in India stood at 108 million tonnes (MT) during FY2022.
- The organised segment accounts for 65% of the total Indian chemicals market valued at USD 178 billion in 2022.
- India's chemicals industry employs over 2.5 million people directly and indirectly as per 2023 estimates.
- Per capita chemicals consumption in India is 8.5 kg, significantly lower than the global average of 25 kg in 2022.
- The dyes and pigments segment constitutes 3% of global production with India holding 16% market share in 2023.
- India's share in global chemicals production is expected to rise from 3.5% in 2022 to 7% by 2040.
- The industry witnessed a CAGR of 9.34% in production from FY2018 to FY2023.
- Bulk chemicals dominate with 62% share in total production volume in FY2023.
Industry Overview Interpretation
While India's chemical industry already flexes its global heft as a top-six producer and a major employer, its true potential lies in the vast, untapped market signaled by a per capita consumption still playing catch-up, promising a future where it could double its share of the world's output.
Policy and Future Projections
- Investments worth INR 1.5 lakh crore approved under PLI scheme for chemicals by 2023.
- Government announced USD 2.5 billion incentives for bulk drug parks in 2023.
- PLI scheme attracted 48 projects worth INR 85,000 crore in chemicals by mid-2024.
- National Chemical Policy 2024 targets USD 300 billion industry size by 2030.
- 100% FDI allowed under automatic route in chemicals sector as per 2023 policy.
- Budget 2024 allocated INR 10,000 crore for petrochemical refineries expansion.
- Methanol Economy Mission aims for 20 MTPA production by 2030 with INR 50,000 cr investment.
- Gati Shakti plan includes 15 new chemical parks by 2025.
- RoDTEP scheme refunded INR 5,000 crore to chemical exporters in FY2023.
- Industry projected to grow at 12% CAGR to USD 400 billion by 2040.
- 50 green hydrogen projects approved with 5 MTPA capacity by 2030.
- Projected capacity addition of 10 MTPA ethylene by 2028.
- Specialty chemicals market to reach USD 64 billion by 2025 at 12% CAGR.
Policy and Future Projections Interpretation
India is betting the chemical farm with a multi-billion dollar cocktail of incentives, policy pushes, and ambitious production targets, aiming to catalyze a transformation from a bulk supplier to a high-value specialty powerhouse and secure its position as a global chemical juggernaut.
Production Statistics
- Petrochemicals production in India reached 15.2 MT in FY2023, up 12% YoY.
- Caustic soda production capacity stood at 5.2 million tonnes per annum (MTPA) as of March 2023.
- India's PVC production was 2.8 MT in FY2023, with capacity utilisation at 85%.
- Synthetic rubber production hit 0.25 MT in FY2022-23, growing 8% YoY.
- Agrochemicals production volume was 35 million metric tonnes in FY2023.
- India's methanol production capacity is 0.8 MTPA, with plans to expand to 5 MTPA by 2030.
- Polyethylene (PE) production reached 4.1 MT in FY2023 at 92% capacity utilisation.
- Soda ash production was 3.6 MT in FY2022-23, up 5% from previous year.
- Titanium dioxide production capacity in India is 0.4 MTPA as of 2023.
- Linear Alkyl Benzene (LAB) production stood at 0.42 MT in FY2023.
- Chemical production index grew by 7.2% in April 2024 YoY.
- India's total installed capacity for olefins was 8.5 MTPA in 2023.
- Fertilizer production reached 47 MT in FY2023, with urea at 31 MT.
- Paints and coatings production volume was 5.2 billion litres in FY2023.
- Ethylene production capacity expanded to 4.2 MTPA by end-2023.
- Chlor-alkali production was 4.8 MT in FY2022-23.
- Specialty chemicals production grew to 12 MT in FY2023 at 11% CAGR.
- Petrochemicals production in India reached 15.2 MT in FY2023, up 12% YoY.
- Caustic soda production capacity stood at 5.2 million tonnes per annum (MTPA) as of March 2023.
Production Statistics Interpretation
While India's chemical industry is busy churning out everything from farm-saving fertilizers to wall-covering paints at a breakneck pace, this impressive, multi-faceted growth reveals a nation industriously building the molecular backbone of its own economy.
Trade Data
- India's chemical exports reached USD 24 billion in FY2023.
- Chemical imports stood at USD 28.5 billion in FY2023, with a trade deficit of USD 4.5 billion.
- Organic chemicals exports grew 18% YoY to USD 12.3 billion in FY2023.
- India exported dyes to over 90 countries, valued at USD 1.2 billion in 2023.
- Petrochemical exports surged 25% to USD 8.7 billion in FY2023.
- Pharma APIs and intermediates exports hit USD 18 billion in FY2023.
- India is the world's largest exporter of castor oil derivatives, USD 1.1 billion in 2023.
- Agrochemical exports reached USD 4.8 billion in FY2023, 12% YoY growth.
- Inorganic chemicals imports were USD 5.2 billion, mainly from China in FY2023.
- India's share in global dyes exports is 25%, valued at USD 1.5 billion in 2022.
- PLI scheme boosted chemical exports by 15% in first year of implementation.
- Top export destinations for Indian chemicals: USA (18%), China (12%), EU (15%) in 2023.
- Methanol imports declined 20% to USD 1.2 billion after domestic capacity addition in 2023.
- Bulk drug exports grew 22% to USD 2.5 billion in H1 FY2024.
- Chemical trade balance improved to -USD 3.8 billion in FY2024 Q1.
- India imported 65% of its petrochemical needs worth USD 18 billion in FY2023.
Trade Data Interpretation
While India's chemical industry paints a vibrant export picture with its rainbow of dyes and life-saving pharma ingredients, the sobering backdrop is a canvas still primed with hefty import bills, revealing a sector brilliantly coloring the world but yet to fully master its own chemical self-portrait.
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