Chemical Industry – An Overview

Chemical Industry is one of the fastest growing Industries globally. Demand in different segments of chemical Industry like pharmaceuticals, Inorganic Chemicals, Organic Chemicals, Fine and specialties, Bulk Drugs, Agrochemicals, and Paints and Dyes are also increasing rapidly. Industry players are following state of the art techniques and extensive research and development policies to fulfill this increasing demand for chemical.

Chemical Industry and India

India was importing chemicals during early 1990s, but now India has become a net exporter of chemicals because of implementation of several large scale petrochemical plants, and tremendous growth of exports in sectors like bulk drugs and pharmaceuticals, pesticides, and dyes and intermediates.

Currently India is a strong player in chemicals export. Following are some facts related to Chemical Industry in India (Analysis based on Year 2005):

13% of total export
13% of total industrial output and 7% of GDP
10%-12% growth rate annually
2% of global chemical industry
Indian pharmaceuticals industry ranks 4th in volume and 13th in terms of value in world
2nd largest producer of agrochemicals in Asia

Factors Affecting Indian Chemical Industry

There are few factors resulting growth of Indian Chemical Industry. Some important factors are as following:

1. Friendly Government Policies: In recent years government policies have become more and more industry friendly, following the similar global industry friendly trend. Government is eager to provide land and basic infrastructure for new industry establishments, because industries are powerful elements in contributing rapid growth of development.

2. Increasing Demand: There is increase in demand of chemicals globally, be it pharmaceutical, agrochemicals, adhesives, fertilizers, or other chemicals. So industry players are trying to increase their current production to match increasing demand.

3. Technology factors: The change in technology is also a factor in development of chemical industry. Newer machinery, better technology, and research are major cause behind growth rate of this industry.

4. Involvement of major players: Involvement of major industry players in chemical industry, as well as acquisition of overseas companies by Indian Giants led strong worldwide reputation of Indian chemical manufacturers.

5. Presence of raw materials: India is rich in minerals and other raw materials required in production of chemicals that decreases input capital required and increases overall revenues of manufacturers.

In coming years industry is going to grow with more than current growth rate. In 2005 its contribution to GDP was 7%, which increased to 13% in year 2007. Domestic demand is also increasing so we don’t need to look for exports always. Past few years witnessed tremendous growth and we can expect similar trends in future too.