India’s Booming Chemical Industry: A Look at the Growth Drivers and Opportunities

India’s booming chemical industry attributes its success to growing demand and supportive government policies. The output of India’s chemical industry ranks sixth in the world and third in Asia. The chemical industry contributes up to 7% of India’s GDP and is a major supplier to industries as diverse as textiles, pharmaceuticals and agrochemicals. Government initiatives including chemical development programs and plastic parks are driving investment opportunities. It is worth noting that the chemical industry allows 100% FDI through the automatic route, except for specific hazardous chemicals.

India’s chemical industry is thriving due to rising demand and favorable government policies. India has an impressive position among global chemical manufacturers, ranking sixth in the world and third in Asia.

The chemical industry plays a vital role in the Indian economy, providing a variety of basic materials and raw materials for various industries such as textiles, paper, coatings, soaps and detergents, pharmaceuticals and agrochemicals.

To encourage investment, the government has introduced various policies such as the Chemical Promotion and Development Programme, Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs), and Plastic Parks.

Also, the Indian government is considering launching a Production Chain Incentive (PLI) scheme for the chemical and petrochemical industries to boost domestic manufacturing and exports. The scheme is designed to provide corporate incentives based on sales growth of domestically produced products.

In the 2023-2024 federal budget, the central government allocated $20.93 million to the chemicals and petrochemicals sector. This grant underlines the Government’s commitment to support and further develop the chemical industry.

Chemical Industry Overview

The Indian chemical industry is expected to reach USD 304 billion by 2025, with a compound annual growth rate (CAGR) of 9.3%.

India’s chemical industry has a market value of US$220 billion, and experts predict that it may reach an astonishing scale of US$1 trillion by 2040.

India’s demand for chemicals is expected to grow at an annual rate of 9% through 2025, and the chemical industry is expected to contribute $383 billion to India’s GDP in 2030. This growth is expected to stem from increasing end-user demand for specialty chemicals and petrochemicals.

According to Invest India, the chemical and petrochemical industry in India is a $178 billion market.

The Indian chemical industry covers approximately 80,000 commodities and employs more than 2 million people, accounting for 3.4% of the global chemical industry.

India has a strong position in international trade in chemicals, ranking ninth in global exports and sixth in imports (excluding pharmaceuticals). India accounts for 2.5% of global chemical sales, exporting to more than 175 countries around the world. The main export destinations are the US, China and emerging destinations – Turkey, Russia and Northeast Asia (China, Hong Kong, Japan, Korea, Taiwan, Macau and Mongolia).

Exports of organic chemicals ($9.64 billion) and inorganic chemicals ($2.17 billion) are estimated to reach $17.19 billion from April 2022 to March 2023. The Indian chemical industry is an important attraction for investors due to growing demand and policy support from the government. A network of 200 national laboratories and 1,300 R&D centers provides a solid foundation for the Indian chemical industry to drive innovation.

Petrochemical Industry and Polymers

India has made significant progress in this area and is expected to invest Rs 8 trillion (equivalent to $107.38 billion) in chemicals and petrochemicals by 2025. India’s demand for petrochemicals is expected to grow at a rate of 7.5% between 2019 and 2023, while demand for polymers is expected to grow at a rate of 8%.

It is worth noting that India ranks third in global polymer consumption and is expected to consume about 60 million tons of polymers by 2040. This bodes well for the future prospects of the chemical, petrochemical and polymer industries in India and globally.


The Indian fertilizer market is expected to register a CAGR of 4.7% during the period 2023-2028 to reach a projected value of USD 116.018 billion. In 2021, the Indian fertilizer market will be worth $841.2 billion.

Increased demand for food production and improvements in agricultural processes drive market growth.

The fertilizer market is based on factors such as product type, market segment, formulation, application, and region.

In the fertilizer market, two main types are attracting attention: chemical fertilizers and biological fertilizers. Notably, chemical fertilizers accounted for a significant portion of the market share, establishing their dominance.

Depending on the specific category, further segmentation includes compound fertilizers, DAP, MOP, urea, and SSP, among others. Currently, DAP is the most prominent type, occupying a considerable portion of the market share.

Based on the formulation, the market is segmented into liquid fertilizers and dry fertilizers. The majority share of the market belongs to the dry fertilizer segment and represents the forefront of this segment.

Likewise, based on the area of ​​application, the market is categorized into agriculture and horticulture. Currently, agricultural applications dominate and account for a larger portion of the market demand.

Geographic segmentation divides the market into four regions: North India, South India, East India, and West India. It is worth noting that in the Indian fertilizer market, North India is the market leader.

specialty chemicals

Specialty chemicals are compounds specially formulated for a specific purpose, covering applications such as pharmaceutical production, beauty product enhancement and industrial process optimization. Manufacturing these chemicals often requires advanced R&D efforts to fulfill their specialized functions. Their importance in various industries is enormous, offering unique attributes that are difficult to replicate with traditional chemicals.

According to an industry report, India’s specialty chemicals industry accounts for 22 percent of the chemicals and petrochemicals market and is expected to double its market share by 2027. Industry players are actively adopting strategies such as substitution of imports and foraying into exports to expedite business expansion.

Globally, specialty chemicals make up 20 percent of the massive $4 trillion chemical industry. The specialty chemicals market in India is expected to experience a significant growth trajectory and is projected to reach a valuation of USD 64 billion by 2025, at a projected CAGR of 12%. This growth will be driven by strong demand, with an expected CAGR of between 10% and 20% in the export and end-user segments.

Growing demand from end-user segments such as food processing, personal care, and home care is driving the diversification and growth of the specialty chemicals market in India.


According to Expert Market Research (EMR), the agrochemical chemicals market in India is expected to grow rapidly at a CAGR of 8.6% between 2021 and 2026 to reach USD 7.4 billion. About 50% of the pesticide chemicals are exported from India. India ranks fourth among global producers of agrochemicals, after the US, Japan and China. Also, India is the 13th largest exporter of pesticides and disinfectants. The growth in demand for agrochemical chemicals is primarily driven by the agricultural sector. The anticipated expansion of the market is supported by factors such as low-cost manufacturing, skilled human resources, seasonal domestic demand, competitive pricing, overcapacity, and strong presence in generic pesticide manufacturing.

My apologies to Indian Chemistry, my previous answer seems to be truncated. The following is a continuation section on the Indian Chemicals Market:

Forecasts for the Indian chemicals market point to continued growth in the coming years. However, the chemicals market is influenced by various factors, including market demand, government policies, competitive landscape, and global economic conditions, among others. Therefore, the actual development of the market may vary.

It is important to note that the chemicals industry is a highly complex and diverse field involving a variety of different products and applications. As such, specific trends and opportunities in the market may vary across specific chemical sub-sectors. If you are interested in a specific type of chemical or related market, I can provide you with more detailed information.