Chemicals

Chemicals
Current Status and Size of the Market
India constitutes a relatively small portion of the global market; constituting only 1.9% of global sales and 1.5% of international trade The Indian Chemicals Industry had a turn-over of over $40 billion in 2004-05; constituting about 6% of GDP and 12.5% of the industrial production India is the 12th largest producer of chemicals in the world Exports of over $12 billion in 2004-05 Manufactures more than 70,000 products


Structure of Indian Textiles & Garments Industry
The Indian chemicals industry is fragmented with very few large companies with global presence There are over 6,600 chemical manufacturers in India Basic chemicals constitute major share of exports Global majors, like BASF, Dow Chemical, Bayer and Du Pont have operations here


GOI Policy

1.) 100% FDI under the automatic route is allowed for most chemical items

2.) Government/FIPB approval and license are required for few hazardous chemicals

3.) Government plans to set up port based chemical parks in SEZs to encourage clustering, provide infrastructure and enable tax concessions

4.) Plans are there to create downstream SEZs to use the output of these Chemical Parks

Potential & Opportunities

• The Industry is projected to grow to $80 billion by 2010
• 15% p.a. Growth rate is projected for the next 5 years
• India will share 3.9% of the global industry by 2010 from just 1.9% in 2001
• India is projected to be the 3rd largest consumer of polymer by 2010
• Huge and rapidly growing domestic market potential because of low per capita consumption of key petrochemical products
• Plastics: 3 kgs. against global average of 17 kgs.
• Polymers: 4 kgs. against global average of 23 kgs.
• India has a good R&D base with access to low-cost, high-quality work force
• All major raw materials are easily available locally or readily importable
• SEZs are exempted from import tariffs and offered income tax concessions
• Strategic location: High-growth domestic markets, Asia and the Middle East
• Vibrant downstream industry and a large number of small players provide opportunities for JVs, alliances and acquisitions
• Most attractive segments are Basic, Specialty and Knowledge Chemicals
• Total opportunity for investment: Over $75 billion in the next 10 years