The chemical industry in India is the third largest producer in Asia and sixth largest in the world. According to the Department of Chemicals and Petrochemicals, as of 2017, the domestic chemical industry’s size is pegged somewhere between $150-155 billion, accounting for 2.1 percent of the country's gross domestic product (GDP) but only a little more than 3.4 percent of the global chemical market.
With more than 80,000 chemical products being developed for either direct or indirect consumption for almost all the other sectors, the chemical sector is highly diversified. Besides the obvious petrochemicals, agrochemicals, speciality chemicals and fertilizers, other sectors such as pharmaceuticals, textiles and paints offer a huge market opportunity too in India. Hence, the chemical sector is instrumental in the overall economic development of the country.
The government itself expects the chemical industry to double in size to over $300 billion by 2025, clocking an annual growth rate of nearly 8-10 percent. According to leading market players, plans to introduce a new policy to promote the domestic industry and curb imports are already in motion.
Taking all these factors into account, the domestic chemical market shines brightly as a lucrative space to invest. Bundle these with a significantly lower cost of labour, easy availability of key raw materials, a large consumer base and the potential to scale-up with the adoption of technology, it becomes too good an opportunity to give it a miss for both existing and aspiring players. A number of local and MNC firms are already vying to get a larger share of the market as even more players make plans to enter the Indian market.
Faced with many handicaps like lesser funding than their foreign counterparts and intense domestic competition, local chemical companies continue to survive though with slim margins. As the global economic order awkwardly shuffles along with low growth volumes, the hypercompetitive environment continues to throw many new challenges.
Sluggish sales volumes in the industry clocked low growth rates in 2016 riding on the wave of a severe shortfall in industrial production and a large-scale optimization of inventories by their customers. Petroleum-based products were worse hit in particular recording a lower-than-normal industry average.
The chemical industry in India is the third largest producer in Asia and sixth largest in the world. According to the Department of Chemicals and Petrochemicals, as of 2017, the domestic chemical industry’s size is pegged somewhere between $150-155 billion, accounting for 2.1 percent of the country's gross domestic product (GDP) but only a little more than 3.4 percent of the global chemical market.
With more than 80,000 chemical products being developed for either direct or indirect consumption for almost all the other sectors, the chemical sector is highly diversified. Besides the obvious petrochemicals, agrochemicals, speciality chemicals and fertilizers, other sectors such as pharmaceuticals, textiles and paints offer a huge market opportunity too in India. Hence, the chemical sector is instrumental in the overall economic development of the country.
The government itself expects the chemical industry to double in size to over $300 billion by 2025, clocking an annual growth rate of nearly 8-10 percent. According to leading market players, plans to introduce a new policy to promote the domestic industry and curb imports are already in motion.
Taking all these factors into account, the domestic chemical market shines brightly as a lucrative space to invest. Bundle these with a significantly lower cost of labour, easy availability of key raw materials, a large consumer base and the potential to scale-up with the adoption of technology, it becomes too good an opportunity to give it a miss for both existing and aspiring players. A number of local and MNC firms are already vying to get a larger share of the market as even more players make plans to enter the Indian market.
Faced with many handicaps like lesser funding than their foreign counterparts and intense domestic competition, local chemical companies continue to survive though with slim margins. As the global economic order awkwardly shuffles along with low growth volumes, the hypercompetitive environment continues to throw many new challenges.
Sluggish sales volumes in the industry clocked low growth rates in 2016 riding on the wave of a severe shortfall in industrial production and a large-scale optimization of inventories by their customers. Petroleum-based products were worse hit in particular recording a lower-than-normal industry average.
No comments:
Post a Comment