Petrochemicals Driving India's Chemicals Market Growth

India's chemicals market, currently valued at USD 220 billion in 2023, is forecasted to soar to USD 383 billion by 2030, driven by an 8.1 percent anticipated compound annual growth rate (CAGR) from 2021 to 2030. This substantial growth positions India as the sixth largest market globally by chemical sales, which has been a magnet for foreign direct investment (FDI). From April 2000 to September 2023, the sector has attracted cumulative FDI inflows of USD 21.7 billion. This influx of investment is facilitated by the sector's allowance for 100 percent FDI under the automatic route, boosting investor confidence and supporting market expansion.

The Petroleum, Chemical, and Petrochemical Investment Regions (PCPIRs) in India are expected to draw investments worth USD 420 billion, reflecting the sector's robust potential. Additionally, the establishment of seven Central Institutes of Petrochemicals Engineering & Technology (CIPET) and the Institute of Pesticide Formulation Technology (IPFT) is set to drive skill development, ensuring a skilled workforce to support industry growth. The chemicals sector's contribution to India's total exports stands at 12 percent, underscoring its global significance.

Specialty chemicals, in particular, are projected to grow at a CAGR of 12 percent from 2020 to 2025, spurred by innovations and increasing demand across various applications. The market's value-added segment is expected to reach USD 29.7 billion in 2024, with a CAGR of 3.26 percent from 2024 to 2029. In 2024, the value added per capita in the chemicals market is projected to be USD 20.6, with a value-added margin of 21 percent.

Overall market output in the chemicals sector is anticipated to reach USD 143.3 billion by 2024, growing at a CAGR of 2.71 percent over the next five years. The output per enterprise is projected at USD 9.1 million. The number of enterprises operating in this market is expected to increase to 15,730 by 2024, with a CAGR of 4.70 percent from 2024 to 2029. This growth will result in a higher enterprise density of 11 enterprises per 100,000 population, highlighting the sector's expansion in both market value and enterprise numbers.