• The Chemical industry in India provides several building blocks and raw materials for many industries, including textiles, paper, paints, soap and detergents, pharmaceuticals and agrochemicals.*
  • India is the 6th Largest producer of Chemicals in the world and 3rd in Asia. India ranks 14th position in the export of chemicals.*
  • India is 4th largest producer of agrochemicals in the world and manufactures more than 50% technical grade pesticides.*
  • India is the largest producer and exporter of castor oil in the world and is responsible for almost 85-90 % of total global exports in this segment.*
  • Market size of Chemicals & Petrochemicals sector in India is worth ~$178 bn.*
  • Indian chemicals and petrochemicals industry is growing to new heights, looking forward to an investment of INR 8 lakh cr by 2025.*
  • India leads in Dyes production and contributes to 16%-18% to world’s dyestuff exports. Indian Dye is exported to over 90+ countries.* 
  • India exports Chemicals to more than 175 countries. It accounts for 13% of India’s total exports. *
  • India is the second highest producer and consumer of chemical fertilisers in the world. Per hectare fertiliser consumption in the country has increased by 75% during the last two decades. *
Reasons to Invest
  • The value additions in the petrochemicals chain offer immense possibilities and cater to the needs of textiles and clothing, agriculture, packaging, infrastructure, healthcare, furniture, automobiles, information technology, power, electronics and telecommunication, irrigation, drinking water, construction and a variety of other articles of daily and specialized usage amidst other emerging areas.*

  • In recent times, there has been a global shift towards Asia as the world’s chemical manufacturing hub.*
  • India also offers the availability of a large pool of skilled science professionals.*
  • India has several world-class engineering facilities and strong R&D capabilities.*
  • The per capita consumption of chemicals is lower in India, compared to western countries, therefore presenting immense scope for setting up export-oriented manufacturing units through new investments.*
  • To promote investments in the sector, the government is implementing four Petroleum, Chemical and Petrochemical Investment Regions (PCPIR) in the country. PCPIRs will be clustered providing investors with a transparent and investment-friendly policy and facility regime.*
  • The government has been promoting the use of ethanol as a blendstock with main automotive fuel like petrol in line, envisages an indicative target of blending 20% ethanol in petrol by 2030.*
  • The Union Cabinet has approved the proposal of the Department of Fertilizers for Nutrient Based Subsidy (NBS) rates for Phosphatic and Potassic (P&K) fertilizers for Kharif Season - 2022 (from 01.04.2022 to 30.09.2022).*
  • Cabinet has approved Subsidy amounting to INR 60,939.23 crore for NBS – Kharif season 2022; Over 50% increase in per bag subsidy over last year.*
  • Government signs MOU with ILO to create a cadre of trainers to further ensure safety measures in industries.*

Explore more about infrastructure availability in the Chemicals sector >

Key Achievements
  • Under its diversification programme, FCI Aravali Gypsum and Minerals India Limited (FAGMIL) has taken up a project to establish a white cement plant near village Nohra Dhar in the Sirmour district of Himachal Pradesh, at a project cost of approximately INR 605 cr.*
  • The production of Pesticides & Insecticides has increased by 23.5%.
  • Indian Scientists have designed a new non-toxic organic photocatalyst that can efficiently capture CO2 and convert it into methane.
  • The combined exports of Major Chemicals and Major Petrochemicals in the year 2021-22 (up to June 2022) has increased to INR 36.52 thousand crores from INR 34.68 thousand crores. Imports have increased to INR 55.26 thousand crores from INR 42.48 thousand crores over the corresponding period of last year.*
Recent Announcements

20th March 2023: An enzyme called laccase generated by a group of fungi has been found to have potential treating heavily dye-polluted water through a natural solution to make the environment greener.

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10th March 2023: UP CM Sh. Yogi Adityananth inaugrates Berger Paints manufacturing unit in Sandila worth INR 1000 cr.

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6th March 2023: PM Modi lauds India's move towards self-reliance with government approval of Nano DAP.

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23rd February 2023: NHAI to explore use of Phosphor-Gypsum in National Highway construction to achieve a circular economy in the use of Gypsum.

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15th February 2023: Union Minister for Chemicals and Fertilizers, Dr Mansukh Mandaviya inaugurated the IFFCO Nano Urea Liquid Plants at Aonla and Phulpur in Uttar Pradesh.

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  • Overall growth in production of Major Chemicals in 2022-23 (up to July 2022) over 2021-22 (up to July 2021) has been 5.73% with major rise accounted in majority of sub sectors *
    • Alkali Chemicals – 8.68%
    • Inorganic Chemicals – 4.39%
  • Certain sub sectors under Major Petrochemicals have recorded an increase in production in 2022-23 (up to July 2022) over 2021-22 (up to July 2021) * -
    • Synthetic Fibres – 3.54%
    • Performance Plastics – 15.43% 
    • Other Petrochemicals – 2.75%
  • The combined exports of Major Chemicals and Major Petrochemicals in the year 2022-23 (up to July 2022) have increased to INR 48.05 thousand crores from INR 47.35 thousand crores. *
  • The quantum of production of Major Chemicals increased to 43.51 lakh tonnes during 2022-23 (Up to July 2022) as compared to 41.15 lakh tonnes during the corresponding period of the previous year, recording an increase of 5.73%. *
  • Fertilizers production (weight: 2.63 per cent) increased by 17.9 per cent in January 2023 over January 2022. Its cumulative index increased by 10.5 per cent during April to January, 2022-23 over the corresponding period of previous year. *
  • Exports of Organic & Inorganic Chemicals values at USD 2,332.92 mn in September 2022 and shares 7.15% of the total exports of the month. *
  • Exports of Organic and Inorganic chemicals values at USD 29152.67 mn in FY 21 and records positive growth vis-à-vis FY20 of 31.98%. * 
  • Organic and Inorganic chemicals shares 6.98% of the total exports of the country in FY21.*
  • Exports of Plastic and Linoleum values at USD 744.43 mn in August 2022 and shares 2.26% of the total exports of the month. *
  • Exports of Plastic and Linoleum values at USD 9783.35 mn in FY21 and records positive growth vis-à-vis FY20 of 31.09%. * 
  • Plastic and Linoleum shares 2.34% of the total exports of the country in the period Apr21- Mar22. *
  • The Average Index of Industrial Production of Manufacturing of chemicals and chemical products in the FY 2021-22 is 120.7 and has grown by 4.1 percent. *
  • Export of Indian Chemicals has registered an overwhelming growth of 106% in 2021-22 over 2013-14 with a record at USD 29.29 bn from USD 14.2 bn in 2013-14. *
  • During 2018-19 and 2020-21, biofertilisers (liquid base and carrier base) production has increased from 96 MMT to 235 MMT. *
Growth Drivers
  • Indian Potash limited (IPL) signs MoU with Israel Chemicals Limited (ICL) for the supply of Muriate of Potash (MOP) for the period 2022 to 2027 with the aim to propel agriculture production and improve lives of farming community.*
  • Centre Grants ‘in-Principle’ Approval of three Bulk Drug Parks to Himachal Pradesh, Gujarat and Andhra Pradesh.*
  • IFFCO has started production of Nano Urea and the work on nano DAP, as less amount of nano Urea will be used contrary to the quantity used for fertilizers at present and contribute to higher nutrient use efficiency.*
  • GOI aims to make Atmanirbhar Bharat in Urea and DAP Production by using 'Green Hydogen'.*
  • Department of Chemicals & Fertilizers sets up a Joint Task Force to explore possibilities of utilize by-products of Petroleum and Petrochemical Industries for Producing Crucial Intermediates for Pharmaceutical and Agrochemical Industries.*
  • Vocational Training Centre of CIPET at Bhavnagar, Gujarat is inaugurated, aimed at providing quality training and creating competent workforce for the Chemicals and Petrochemicals Industry.*
  • NTPC REL inks MoU with GACL to collaborate in Renewable Energy and synthesize Green Chemicals. The MoU envisages collaborating in the field of Renewable Energy, Green Methanol & Green Ammonia and mutually exploring the opportunities for the supply of 100 MW RE-RTC (Round The Clock) power and synthesizing 75 TPD Green Methanol and 35 TPD Green Ammonia for captive use for the production of various chemicals by GACL at its Vadodara and Dahej complex in Gujarat.*
  • Madras Fertilizers Limited has signed an MoU for procuring 30,000 MT of Phosphoric Acid Solution from M/s Agrifields, Dubai annually for three years to improve availability of DAP and NPK fertilizers for the farming community of the country.*
  • PM inaugurates 600 PM Kisan Samruddhi Kendras (PM-KSK) of Ministry of Chemicals & Fertilizers. The fertilizer retail shops will be converted into one stop shop in phased manner tol cater to the needs of the farmers in the country and provide agri-inputs (fertilizers, seeds, implements); testing facilities for soil, seeds, fertilizers; awareness among farmers ; provide information regarding various Government schemes and ensure regular capacity building of retailers at block/ district level outlets.*
FDI Policy
  • 100% FDI is allowed under the automatic route in the Chemical industry, except in the case of hazardous chemicals. *
  • The cumulative FDI equality inflow in the Chemicals industry (excluding fertilizers) is USD 20.96 bn during the period April 2000 to December 2022. This constitutes 3.35% of the total FDI inflow received across sectors. *
  • The cumulative FDI equality inflow in the Fermentation industry is USD 4.15 bn during the period April 2000 to December 2022. *
  • The cumulative FDI equality inflow in the Fertilizers Industry is USD  713.06 mn during the period April 2000 to December 2022. *
  • The cumulative FDI equality inflow in the Dye Stuff is USD 102.45 mn during the period April 2000 to December 2022. *
  • The cumulative FDI equality inflow in the Glue & Gelatin is USD 162.33 mn during the period April 2000 to December 2022. *


Read more about Foreign Direct Investment Policy in India >

Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Advance Chemistry Cell Battery for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.

Financial Outlay- INR 18,100 cr

For more details on PLI Schemes, Click Here

Sector Policy

Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs)*

  • The Government of India has conceptualized PCPIRs as clusters that provide investors with a transparent and investment-friendly policy and facility regime. PCPIRs have a high-class infrastructure and provide a competitive environment conducive to setting up businesses. 
  • Each PCPIR is a specifically delineated region spread over an area of about 250 sq. km. These areas will have manufacturing facilities, along with associated logistics and other services. The required infrastructure along with a non-processing area will be developed, to include residential, commercial and other social and institutional infrastructure. 
  • The minimum processing area for the PCPIR will be about 40% of the total designated area, i.e., around 100 sq. km.
  • The Ministry of Chemicals & Petrochemicals has set up four PCPIRs in Dahej (Gujarat), Vishakhapatnam-Kakinada (Andhra Pradesh), Paradeep (Odisha), and Cuddalore and Nagapattinam (Tamil Nadu). 
  • The projected investment on the full realisation of PCPIRs is INR 7.63 lakh cr. 

PCPIR projects for National Infrastructure Pipeline (NIP): 

  • 14 projects worth INR 18,843 cr by Odisha PCPIR
  • 5 projects worth INR 3,758 cr by Gujarat PCPIR

For more details on the PCPIRs, refer to PCPIR Policy.


Plastic Parks*

  • The Department of Chemicals and Petrochemicals has formulated the scheme for setting up Plastic Parks with the objective of synergizing and consolidating the various units of the Indian Plastics Industry. The larger objective of the scheme is to contribute to the economy by increasing investment, production, export in the sector and also the generation of employment.
  • The units will be consolidated through the cluster development approach. The Government of India will provide grant funding of up to 50% of the project cost subject to a ceiling of INR 40 cr. The remaining project cost is to be funded by the State Government or State Industrial Development Corporation.
  • Plastic Parks in the States of Madhya Pradesh, Odisha, Jharkhand, Assam and Tamil Nadu are being set up under the scheme of Plastic Parks.

For more details, refer to Scheme for Setting Up Plastic Parks.


National Policy on Petrochemicals*

  • The National Policy on Petrochemicals aims to achieve sustainable development for the petrochemical industry by promoting research and development and human resource planning and development to cater to the needs of the industry by adopting a mission mode approach.
  • A programme on Petrochemical Development is required to improve existing petrochemical technology and research in the country and to promote the development of new applications of polymers and plastics. Centre(s) of Excellence (COE) are being set up for this reason and will be one of the components of the programme.
  • COEs will be set up in existing educational and research institutions working in the field of polymers, and include the following:
    • Updating and modifying products for new uses
    • Innovative product technology and product designs
    • Improving production processes to make them more efficient
    • Development of biopolymers and biodegradable polymers
  • The COEs are expected to emerge as internationally recognised centres for the analysis and dissemination of existing global knowledge, provide authoritative, strategic and timely information to organizations and companies to use in the development and implementation of their projects/programmes, which engaging in path-break R&D efforts.
  • 8 COEs have been set up in Pune, Chennai, Delhi, Bhubaneshwar, Roorkee and Guwahati.

For more details, refer to National Policy on Petrochemicals.


Chemicals Promotion Development Scheme*

The aim of the Chemicals Promotion Development Scheme (CPDS) is promotion and development of chemical and petro-chemical industry by extending financial support to conduct of seminars, conferences, exhibitions, conducting studies/consultancies, for facilitating growth as well as analysing critical issues affecting the chemical and petrochemical industry.

For more details, refer to Chemical Promotion Development Scheme.


Central Institute of Plastic Engineering and Technology*

The Central Institute of Plastic Engineering and Technology (CIPET) has been set up to develop manpower in different disciplines of Plastics Engineering and Technology. The CIPET has a variety of activities and programs focusing on skill training, technology support, academics and research.

For more details, refer to the Central Institute of Plastic Engineering and Technology.


Explore Government policies/schemes in the Chemicals sector >

Financial Support


  • The total budgetary allocation for FY 2022-23 towards the Department of Chemicals and Petrochemicals is INR 209  cr.

  • The total budgetary allocation for FY 2022-23 towards the  Department of Fertilisers is INR 1,05,262.23 cr.


  • A weighted tax deduction is given under section 35 (2AA) of the Income Tax Act.
  • Weighted deduction of 200% is granted to assess for any sums paid to a national laboratory, university or institute of technology, or specified people with a specific direction and that the said sum is used for scientific research within a program approved by the prescribed authority.


  • Section 35 (2AB) of the Income Tax Act, 1961 provides a weighted tax deduction of 150% of the expenditure incurred by a specified company, on scientific research in the in-house R&D centres as approved by the prescribed authority. This does not include expenditure on the cost of any land or building.
  • The weighted tax deductions of 150% are effective till 31st March 2020. Consequent to that, the weighted tax deductions will be 100%.


  • Apart from the above, each state in India offers additional incentives for industrial projects.
  • Incentives are in areas like subsidized land cost and relaxation in stamp duty exemption on sale/ lease of land, power tariff incentives, concessional rate of interest on loans, investment subsidies/tax incentives, backward areas subsidies and special incentive packages for mega projects.


  • Export promotion capital goods scheme
  • Duty drawback scheme
  • Merchandise Export from India Scheme


  • Incentives for units in Special Economic Zones (SEZ)/ National Investment and Manufacturing Zones (NIMZ) as specified in respective Acts or setting up projects in special areas like the North-east, Jammu & Kashmir, Himachal Pradesh & Uttarakhand.
Investment Opportunities

Dyestuff Industry* 

The Indian Dyestuff Industry is an important sub-sector of the Chemicals industry and it ranks second in Asia. It also accounts for 16% of the world market. It has forward and backward linkages with various sectors such as paper, textiles, plastics, printing inks, leather and foodstuffs. The sub-sector has immense potential and serves as a profitable opportunity for investors.

Pesticides Industry* 

India is the 4th largest producer of agrochemicals in the world. With more than 45 technical grade pesticides being manufactured in the homeland, the country qualifies as one of the most dynamic generic pesticide manufacturers in the world. Being a net export earning industry, it has a significant contribution to the foreign exchange basket of the country.

Fine & Specialty Chemicals*

India produces many fine and speciality chemicals, which are essential for increasing industrial production. These special chemicals find wide usage as polymer additives, food additives and pigments and anti-oxidants in the rubber industry.


Explore projects to invest in Chemicals sector >

Sector Reports
  1. Year End Review 2022: Department of Fertilizers
  1. About Chemicals, Department of Chemicals & Petro-chemicals,
  2. “Annual Report 2019-20", Department of Chemicals & Petro-chemicals,
  3. About Chemicals, Department of Chemicals & Petro-chemicals,
  4. Consolidated FDI Policy,
  5. Central Institute of Plastics Engineering and Technology,
  6. “India Budget”, Department of Chemicals and Petrochemicals
  7. "Gowda congratulates Chemical & Petrochemicals industry on becoming the topmost exporting segment for the first time with exports valued at Rs 2.68 lakh crore in April 2019 - January 2020", PIB,
  8. "Year-End Review 2019: Ministry of Chemicals & Fertilizers", PIB,
  9. Factsheet on FDI - April 2000 to March 2022Department for Promotion of Industry and Internal Trade,
  10. PIB Release,
  11. Department of Chemicals & Petro-chemicals,
  12. PIB Release,
  13. PIB Release,
  14. Year-End Review- 2020:Ministry of Chemicals & Fertilizers,
  15. PIB Release,
  16. PIB Release,
  17. Monthly Achievement Report,

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