Context:
- India’s chemical exports stood at $44 billion in 2023.
- NITI Aayog has proposed a comprehensive strategy to nearly double exports by 2030, addressing infrastructural, regulatory, and demand-related challenges.
| Parameter | Status |
| Global Rank (Production) | 6th globally; 3rd in Asia |
| Contribution to GDP | 7% |
| Global Export Rank (ex-pharma) | 14th |
| FY23 Export Value | $23.8 billion (major chemicals + petrochemicals) |
| Trade Deficit (2023) | $31 billion |
| Share in Global Value Chains | 3.5% (vs China’s 23%) |
| Growth Target | $1 trillion market size by 2040 |
India’s Chemical Industry Snapshot:
Key Objectives of the NITI Aayog Proposal:
- Double chemical exports by 2030 to over $80–90 billion.
- Boost India’s share in global chemical value chains from 3.5% to 5–6%.
- Address low domestic demand by focusing on exports of specialty and niche chemicals.
Major Policy Recommendations:
Production Cluster Development
- Revamp existing clusters in Gujarat, Maharashtra, West Bengal, and Tamil Nadu.
- Encourage port-centric chemical clusters for export-oriented manufacturing.
Infrastructure Upgrade
- Resolve logistics and storage bottlenecks at 14 major and 12 minor ports.
- Establish a dedicated Chemical Committee for infrastructure planning.
Sales-Linked Incentive Scheme (Opex Model)
- Introduce an operational expenditure subsidy to:
- Boost competitiveness in agrochemicals, battery chemicals, pharma intermediates.
- Reduce import dependency in strategic segments.
PCPIR Policy 2020–2035 Revamp
- Targets:
- $142B investment by 2025
- $213B by 2030
- $284B by 2035
- Renew focus on Dahej, Paradeep, Vizag PCPIRs.
Supply Chain Resilience
- Identify supply chain choke points, inspired by China’s 2018 strategy.
- Allocate subsidies to vulnerable but high-potential segments.
Global Strengths in Niche Segments:
| Segment | India’s Rank/Status |
| Agrochemicals | 4th largest producer |
| Polymers | 3rd largest consumer |
| Dyes & Colourants | 16–18% of global production; ~15% market share |
Government Support Mechanisms:
Chemical Promotion and Development Scheme (CPDS):
- Knowledge products, surveys, and innovation awards.
De-licensing (Except Hazardous Chemicals):
- Simplified regulatory framework to promote investment.
Plastic Parks and Infrastructure Grants:
- Sector-specific hubs for petrochemicals and plastics.
Government Support Mechanisms:
Chemical Promotion and Development Scheme (CPDS):
- Knowledge products, surveys, and innovation awards.
De-licensing (Except Hazardous Chemicals):
- Simplified regulatory framework to promote investment.
Plastic Parks and Infrastructure Grants:
- Sector-specific hubs for petrochemicals and plastics.
Significance & Strategic Implications:
Boost to Export-Led Growth:
- Moving from bulk to specialty chemicals helps value addition.
- Reduces reliance on limited domestic demand.
Reducing Import Dependence:
- Critical in view of recent global supply chain disruptions and China+1 strategy.
Geo-economic Advantage:
- Enhances India’s position in GVCs (Global Value Chains).
- Aids energy transition via support to battery and green chemical sectors.
Employment Generation:
- PCPIR and cluster development expected to generate millions of skilled jobs.
| UPSC Relevance : GS3 : Indian Economy and Exports – Industrial Policy – Infrastructure and Investment GS2 : Government policies & interventions – Regulatory framework in manufacturing Mains Practice Questions: Q. What are the key challenges and opportunities for India in expanding its chemical exports? Examine the role of infrastructure and policy support in boosting India’s share in global value chains. |