India’s Chemicals and Fertilizer minister D V Sadananda Gowda said on Wednesday that an opportunity to attract investments worth one trillion rupees had opened up in the chemicals and petrochemicals sector following recent budgetary announcements.
Speaking at the annual India Chem summit, he said at least 50%-60% of recent production linked incentives announced for 10 manufacturing sector had strong linkages to the chemical and petrochemical industry.
The government had announced production-linked incentives for sectors as wide-ranging as pharmaceuticals to electronics to boost India’s manufacturing competitiveness. Gowda said that the budgetary measures such as reducing the import duty on feedstock such as naptha would further boost the industry’s capability.
India is currently ranked the sixth largest in the world in the chemicals industry and fourth largest in agro-chemicals such as pesticides, fertilizers, and other farm inputs.
“The changing geopolitical scenario, where countries are looking to shift from China to elsewhere can provide us an opportunity,” Gowda added.
The patents on many agro-chemical formulations are due to expire soon. China, which has traditionally been a powerhouse in manufacture of generic agro chemicals, has been clamping down on production facilities because of pollution.
Indian chemicals and agro-chemicals manufacturers, the majority of whom are makers of generic products, are eyeing the space left vacant by China.
The size of India’s chemicals and petrochemicals market is expected to grow to $375 billion by 2025 from $170 billion dollars because of low per capita consumption, Yogendra Tripathi, secretary for chemicals and fertilizers said.
He said that there are at least eight to nine ongoing projects by major companies with a total investment of $70 billion investments in the chemicals and petrochemicals sector.
Bhavesh Patel, chairman of LyondellBasell Industries, said India also had the opportunity to actively develop a plastics recycling industry where the end products are chemicals and petrochemicals.
He estimated that currently $80 billion to $120 billion is lost annually “because we don’t capture the value of used plastics.”
India is one of the largest consumers of plastics. Despite having a strong tradition of recycling, the chain for using up mounds of plastics waste had got upended during the pandemic due to a shortage of workers.