Business News | NITI Aayog Releases Report on Chemical Industry, Outlines Pathway for Positioning India as a Key Player

New Delhi [India], July 3 (ANI): NITI Aayog on Thursday released its report "Chemical Industry: Powering India's Participation in Global Value Chains". The report offers an extensive analysis of India's chemical sector, highlighting both opportunities and challenges, and outlining a pathway for positioning India as a key player in global chemical markets.

The global chemical industry is undergoing a major transformation, driven by shifting supply chains, demand for specialty and green chemicals, and heightened focus on innovation and sustainability.

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India's chemical sector, while significant in size and GDP contribution, remains fragmented and constrained by infrastructure gaps, regulatory inefficiencies, and low R&D intensity.

India's 3.5 per cent share in global chemical value chains and its chemical trade deficit at USD 31 billion in 2023 underscore its high dependence on imported feedstock and specialty chemicals.

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However, with targeted reforms encompassing a comprehensive range of fiscal and non-fiscal interventions will enable India to have a USD 1 trillion chemical sector and achieve 12 per cent GVC share by 2040, thus becoming a global chemical powerhouse.

India's chemical sector faces several structural challenges that constrain its global competitiveness.

A key issue is the country's heavy reliance on imported feedstock, which contributed to a USD 31 billion trade deficit in 2023, stemming from limited domestic backward integration.

Infrastructure gaps, outdated industrial clusters, and high logistics costs have created a cost disadvantage compared to global peers.

Compounding this, India's low investment in R&D, with only 0.7 per cent of investment against the global average of 2.3 per cent, hampers indigenous innovation in high-value chemicals. Regulatory delays, especially in environmental clearances, further stifle industrial agility.

Additionally, the sector is hampered by a 30 per cent shortfall in skilled professionals, particularly in emerging areas such as green chemistry, nanotechnology, and process safety.

NITI Aayog's report outlines several strategic fiscal and non-fiscal interventions aimed at enhancing India's global competitiveness in the chemical sector. (ANI)

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