The Indian chemical industry, led by the Indian Chemical Council (ICC), has set a goal of doubling turnover from the current $150 billion to $300 billion by 2025, provided the government extends its support to the proposed infrastructure and policy changes.
This will require an investment of about $75-100 billion and the target is to reduce import dependency and improve exports. In the changing scenario, India will require at least one new cracker every year with an investment of $1 billion each over the next 10 years to make basic chemicals such as ethylene, propylene, butadiene and other derivatives required for the petrochemical industry to meet the Indian chemical industries' raw material requirements, Bimal Gokul Das, additional vice-president of ICC told Business Today.
"Various sectors are witnessing big changes. For example, the automobile sector will see demand for batteries and the Indian industry is ready to take up this challenge, provided the government supports it with long-term and short-term policy initiatives and required infrastructure," he said.
The Indian chemical industry, growing at over 10 per cent for the past ten years, is estimated to have 40,000-50,000 companies, of which the top companies - including 40 odd multinationals - are members of the ICC. The 400 members of ICC contribute about 85 per cent to India's chemical production.
Noting that the proposed Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) plan mooted several years ago have not taken off so far, he said the industry badly requires good ports, connectivity, cheap power and water to become competitive with countries like China. "In India, we have to set up roads and other infrastructure to start a chemical unit, whereas from land to ground levelling and final infrastructure is provided by the Chinese government and the manufacturer has to only set up his unit," he noted.
Segments of the industry such as specialty chemicals require faster clearance to start manufacturing of new products to grab the changing new markets. While India has capability to compete with China in specialty and value added chemicals, lack of capacities in bulk chemicals is a big concern, as we lack incentives for raw materials, infra and power when compared to countries like China. The various Free Trade Agreements (FTAs) India has entered with different nations have been a disaster for the industry. Now the government has initiated actions like mandating BIS-like certification for imported chemicals to prevent dumping of cheap and substandard chemicals into the country.
Environmental norms in the country is also not helping growth of the industry and liberal norms should be applicable for non-polluting chemical companies. At present, India has only 54 companies having "Responsible Care" certification logo, a global initiative through International Council of Chemical Associations (ICCA) since 2003, to responsibly reduce pollution, taking care of the health and safety of workers etc. India has norms like mandatory effluent treatment of chemicals to reduce salt content, for the water released into deep sea, he said.