Introduction


Chemical industry is one of the oldest industries in India. It not only plays a crucial role in meeting the daily needs of the common man, but also contributes significantly towards industrial and economic growth of the nation

                    (Last updated on 03.03.2008)

 

Global Scenario


The global chemical` industry, estimated at US$ 2.4 trillion, is one of the fastest growing sectors of the manufacturing industry. Despite the challenges of escalating crude oil prices and demanding international environmental protection standards now adopted globally, the chemicals industry has still grown at a rate higher than the overall-manufacturing segment.

As per industry reports the pharmaceutical segment contributes approximately 26% of the total industry output and approx. 35-40% is dominated by the petrochemical segment.

Commodity chemicals is the largest segment in the chemicals market with an approx. size of $ 750 billion while the specialty and fine chemicals segment accounts for $ 500 billion.

Some of the major markets for chemicals are North America, Western Europe, Japan and emerging economies in Asia and Latin America. The US consumes approximately one-fifth of the global chemical consumption whereas Europe is the largest consumer with approx. half the consumption. The US is the largest consumer of commodity chemicals whereas Asia Pacific is the largest consumer of agrochemicals and fertilizers.

                        (Last updated on 03.03.2008)

Indian Chemical Industry Scenario


Chemical Industry is one of the oldest industries in India, which contributes significantly towards industrial and economic growth of the nation. It is highly science based and provides valuable chemicals for various end products such as textiles, paper, paints and varnishes, leather etc., which are required in almost all walks of life. The Indian Chemical Industry forms the backbone of the industrial and agricultural development of India and provides building blocks for downstream industries.

Chemical Industry is an important constituent of the Indian economy. Its size is estimated at around US$ 35 billion approx., which is equivalent to about 3% of India's GDP. The total investment in Indian Chemical Sector is approx. US$ 60 billion and total employment generated is about 1 million. The Indian Chemical sector accounts for 13-14% of total exports and 8-9% of total imports of the country. In terms of volume, it is 12th largest in the world and 3rd largest in Asia. Currently, per capita consumption of products of chemical industry in India is about 1/10th of the world average. Over the last decade, the Indian Chemical industry has evolved from being a basic chemical producer to becoming an innovative industry. With investments in R&D, the industry is registering significant growth in the knowledge sector comprising of specialty chemicals, fine chemicals and pharmaceuticals. The Indian Chemical Market Segment wise is as under: -

Segment Market Value (billion US$)
Basic Chemicals 20
Specialty Chemicals 9
High End / Knowledge Segment 6
Total 35

The Indian Chemicals Industry comprises both small and large-scale units. The fiscal concessions granted to small sector in mid-eighties led to establishment of large number of units in the Small Scale Industries (SSI) sector. Currently, the Indian Chemical industry is in the midst of a major restructuring and consolidation phase. With the shift in emphasis on product innovation, branch building and environmental friendliness, this industry is increasingly moving towards greater customer orientation. Even though India enjoys an abundant supply of basic raw materials, it will have to build upon technical services and marketing capabilities to face global competition and increase its share of exports.

As the Indian economy was a protected economy till the early nineties, very little large-scale R&D was undertaken by the Chemical industry to create intellectual property. The Industry would, therefore, have to make large investments in R&D to successfully counter competition from the international chemicals industry. India has a number of scientific institutions and the country’s strength lies in its large pool of highly trained scientific manpower.

India also produces a large number of fine and specialty chemicals, which have very specific uses and are essential for increasing industrial production. These find wide usage as food additives and pigments, polymer additives, anti-oxidants in the rubber industry, etc.

                              (Last updated on 03.03.2008)

Dye Industry


The Dyestuff sector is one of the important segments of the chemicals industry in India, having forward and backward linkages with a variety of sectors like textiles, leather, paper, plastics, printing inks and foodstuffs. The textile industry accounts for the largest consumption of dyestuffs. From being importers and distributors in the 1950’s, it has now emerged as a very strong industry and a major foreign exchange earner. India has emerged as a global supplier of dyestuffs and dye intermediates, particularly for reactives,acid, vat and direct dyes. India accounts for 7% of the world production.

                             (Last updated on 03.03.2008)

Pesticides Industry


Chemical fertilizers and pesticides played an important role in the “ Green Revolution” during the 1960s and 1970s. Indian exports of agrochemicals have shown an impressive growth over the last five years. The key export destination markets are USA, U.K., France, Netherlands, Belgium, Spain, South Africa, Bangladesh, Malaysia and Singapore.

India is one of the most dynamic generic pesticide manufacturers in the world with more than 60 technical grade pesticide being manufactured indigenously by 125 producers consisting of large and medium scale enterprises (including about 10 multinational companies) and more than 500 pesticide formulators spread over the country. India is the 4th largest producer of agrochemicals after USA, Japan and China.  The agrochemicals market in India is Rs.4500 crores.

The government is promoting research on the use of alternative and safe pesticides using neem seeds. A country programme entitled “ Development and production of neem products as Environment Friendly Pesticides” is being undertaken by the Department of Chemicals & Petrochemicals with the financial assistance of United Nations Development Programme (UNDP).

                                          (Last updated on 03.03.2008)

Licensing Policy


In Chemical Sector, 100% FDI is permissible. Manufacture of most chemical products inter-alia covering organic / inorganic, dyestuffs & Pesticides is delicensed. The entrepreneurs need to submit only IEM with the Department of Industrial Policy & Promotion provided no locational angle is applicable. Only the following items are covered in the compulsory licensing list because of their hazardous nature.

  • Hydrocyanic acid & its derivatives

  • Phosgene & its derivatives

  • Isocynates & di-isocynates of hydrocarbons.

                                          (Last updated on 03.03.2008)

Customs Duty


  • The peak rate of Customs Duty on most Chemicals is 7.5%

  • On basic raw materials like acid grade fluorspar, sulphur, rock phosphate, natural borates is 5%

  • On most building blocks & feedstock the duty is 5% (ethylene, propylene, crude, naptha, benzene, toluene, xylene, ethylbenzene)

                                (Last updated on 03.03.2008)

 

Excise Duty             (Last updated in July 2011)


On almost all chemicals the excise duty is 16%

 

Group-wise capacity & production of major chemicals in organized sector

Main Groups

Installed Capacity

Production                         (Figures in MT)

2009-10

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

1

2

3

4

5

6

7

8

9

10

11

12

I:   ALKALI

7489600

4342305

4792345

5070374

5271675

5474614

5268987

5268987

5427233

5601913

5981204

II:  NORGANIC

715915

374132

403827

440608

508157

543965

602309

602309

512513

517511

572052

III: ORGANIC

1940457

1166575

1352653

1473855

1505895

1545262

1545442

1545442

1254171

1281169

1339589

IV: PESTICIDES

146471

81803

69565

85118

93966

82240

84701

84701

85218

82185

81934

V  DYES

54551

24789

26196

25940

28498

29541

32552

32552

37636

51080

47036

TOTAL MAJOR CHEMICALS

(I+II+III+IV+V)

10346994

5989604

6644586

7095895

7408191

7675622

7533991

7533991

7316771

7533858

8021815

 

GROUP - WISE EXPORT & IMPORT OF CHEMICALS

 

( Fiqures in Rs. Crore)

 

Group

 

 

ITC - HS Commodity Level Code

 

 

TRADE

 

 

2001-02

 

 

 

2002-03

 

 

2003-04

 

 

2004-05

 

 

2005-06

 

 

2006-07

 

 

 

 

2007-08

 

 

2008-09

 

 

2009-10

 

 

2010-11

 

 

2011-12

 

INORGANIC CHEMICALS *

 

2 DIGIT- 28

 

Export

 

1259

 

1946

 

1949

 

2871

 

2431

 

3629

 

3317

 

5166

 

4540

 

14008

 

5106

 

Import

 

 

5730

 

5579

 

5916

 

8130

 

10446

 

11473

 

11393

 

 

16270

 

17236

 

20763

 

ORGANIC CHEMICALS

 

2 DIGIT -29

 

Export

 

 

7624

 

10190

 

12975

 

16269

 

21504

 

25950

 

28870

 

34058

 

35241

 

41940

 

40097

 

Import

 

 

8795

 

10695

 

14363

 

18785

 

22776

 

27330

 

32642

 

 

44505

 

57550

 

51230

 

DYEING, TANNING AND COLOURING MATTER

 

 

2 DIGIT -32

 

Export

 

2436

 

2943

 

3112

 

3111

 

3750

 

4562

 

5327

 

5900

 

6556

 

7570

 

6753

 

Import

 

 

1138

 

1344

 

1617

 

1878

 

2245

 

2720

 

3031

 

 

4328

 

5434

 

5370

 

PESTICIDES

 

 

4 DIGIT -3808

 

Export

 

 

1356

 

1487

 

1746

 

2096

 

2791

 

2877

 

5969

 

8615

 

8611

 

10275

 

9098

 

Import

 

 

362

 

 

 287

 

 501

 

712

 

754

 

806

 

7357

 

 

11579

 

13935

 

13749

 

Grand Total

 

 

 

Export

 

 

12675

 

16566

 

19782

 

24347

 

30476

 

37018

 

43483

 

53739

 

54949

 

76359

 

65462

 

Import

 

 

16025

 

 

 17905

 

 22397

 

29505

 

36221

 

42329

 

54423

 

0

 

76682

 

81110

 

91111

 

*             INCLUDING COMPOUNDS OF PRECIOUS METALS, OR RARE-EARTH METALS, OF RADIO-ACTIVE ELEMENTS OR OF ISOTOPES AS CLASSIFIED BY DGCIS KOLKATA.

                                 

 


Leading Chemical Units


M/s.United Phosphorous Ltd, Mumbai

M/s. P.I.Industries, Jaipur M/s.BASF India, Mumbai

M/s.BASF India, Mumbai

M/s. Excel India, Mumbai

M/s.Atul Ltd., Bulsar

M/s. Colour Chem Ltd., Mumbai

M/s. Sudarshan Chemical Industries, Pune

M/s.Colourtex, Ahmedabad

M/s. Monsantu Chem Ltd., Mumbai

M/s. Jubilant Organosys Ltd., New Delhi

M/s. Herdilia-Schentady Ltd. Mumbai

National Organics Chemicals Ltd., Mumbai

DCM Sri Ram Consolidation Ltd., New Delhi

M/s. Gujarat Heavy Chemicals Ltd., Ahmedabad.

M/s. India Glycols Ltd., New Delhi

M/s. Gujarat Alkalies and Chemicals Ltd., Baroda

M/s.Rayalseema Chemicals, Hyderabad

M/s. Galaxy Organic Ltd., Mumbai

M/s. Lubrizol Ltd., Mumbai

M/s. ICI Calcutta

                                      (Last updated on 03.03.2008)

 

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