India’s chemicals and petrochemicals sector: Building the foundation for industrial growth

India’s chemicals and petrochemicals industry is an important pillar of the country’s manufacturing ecosystem, supplying essential raw materials and products to sectors ranging from pharmaceuticals, agriculture and textiles to automobiles, construction, electronics and consumer goods. With a growing domestic market, expanding production capacity and increasing global engagement, the sector is emerging as a significant driver of industrial growth.

India is currently the sixth-largest producer of chemicals globally and the fourth-largest in Asia. Valued at approximately USD 220 billion, the industry is projected to reach USD 300 billion by 2030 and USD 1 trillion by 2040. India also holds strong positions in specialised segments, ranking as the world’s second-largest manufacturer and exporter of dyes and the third-largest exporter of agrochemicals.

The sector comprises approximately 13,000 large-scale units and 4.45 lakh micro, small and medium enterprises (MSMEs). Government initiatives covering industrial infrastructure, investment, research, skill development, product quality and workplace safety are aimed at strengthening domestic capabilities and expanding India’s participation in global chemical value chains.

Why is the chemicals and petrochemicals sector important?

Chemicals and petrochemicals are essential inputs for a wide range of industrial and economic activities. They support the production of medicines, fertilisers, pesticides, synthetic fibres, plastics, paints, construction materials, automotive components and electronic products.

The industry’s importance extends beyond manufacturing. It contributes to agricultural productivity, infrastructure development, exports, employment generation and the growth of downstream industries.

The sector’s expansion also creates opportunities for domestic value addition and reduces dependence on imported materials. Strengthening chemical manufacturing capabilities is therefore important for India’s broader industrial development and global competitiveness.

India Chem 2026: Connecting industry with global markets

The 14th edition of India Chem was held in Mumbai from October 22 to 24, 2026, under the theme “Advantage Bharat: An Emerging Global Chemicals Hub.”

The three-day event brought together industry leaders, businesses and international participants to explore investment opportunities, technological developments and partnerships in the chemicals and petrochemicals sector. It recorded more than 5,000 visitors and featured country forums, a CEO Forum and sector-specific roundtable discussions.

The exhibition showcased industrial technologies, equipment and investment opportunities. The inaugural India Chem Youth Innovation Challenge also encouraged students to develop practical, research-based solutions to industry challenges.

The event provided a platform to connect India’s manufacturing capabilities with international markets while encouraging innovation, investment and sustainable industrial growth.

Expanding manufacturing capacity and attracting investment

A strong manufacturing base requires investment, modern infrastructure and an enabling policy environment. India allows 100% foreign direct investment (FDI) through the automatic route in most chemical sectors, meaning that prior government approval is not required for eligible investments.

FDI inflows into the sector reached ₹1,04,895 crore during 2014–2026, more than double the ₹45,240 crore recorded during 2004–2014.

Domestic production has also expanded. The output of major chemicals and petrochemicals increased from 45,638 thousand metric tonnes in 2015–16 to 58,617 thousand metric tonnes in 2024–25.

To sustain this growth, the Government is developing dedicated industrial regions and specialised manufacturing parks that provide common infrastructure, utilities and support facilities.

Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs)

PCPIRs are integrated investment regions designed to promote large-scale chemical and petrochemical manufacturing through a cluster-based industrial model.

Each PCPIR covers approximately 250 square kilometres, with around 40% of the area earmarked for processing activities. The regions provide common infrastructure and essential services, including road and rail connectivity, ports, water supply, steam generation, sewage disposal and Common Effluent Treatment Plants.

India has three operational PCPIRs: Dahej, Gujarat; Visakhapatnam–Kakinada, Andhra Pradesh; and Paradeep, Odisha.

Together, these regions have attracted investments of approximately ₹3.4 lakh crore, generated 3.7 lakh jobs and facilitated the establishment of more than 2,200 chemical manufacturing units.

By providing shared infrastructure and industrial facilities, PCPIRs help improve operational efficiency and create an environment conducive to large-scale investment.

BHAVYA Rasayan: Dedicated chemical parks

The Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) Scheme, approved in July 2026, aims to establish three dedicated chemical parks to strengthen domestic manufacturing.

Each park will cover at least eight square kilometres, equivalent to 2,000 acres. The Central Government will provide grants of up to ₹1,000 crore per park, subject to a minimum contribution of ₹500 crore from the concerned State Government.

The scheme has a total financial outlay of ₹3,030 crore, comprising ₹3,000 crore for common infrastructure and basic utilities and ₹30 crore for administrative expenditure. It will operate for five years, from FY 2026–27 to FY 2030–31.

The parks will offer plug-and-play infrastructure, helping industries establish manufacturing facilities more efficiently while reducing logistics costs and improving resource utilisation.

They will also incorporate environment-friendly facilities, including Common Effluent Treatment Plants, storage and disposal facilities and hazardous waste management infrastructure. The initiative is expected to attract investment, expand domestic production and strengthen India’s competitiveness in global chemical markets.

Plastic Parks: Supporting downstream manufacturing

The Scheme for Setting up of Plastic Parks focuses on strengthening the downstream plastic processing industry and increasing domestic absorption of polymers, which are key petrochemical products.

Plastic Parks are dedicated industrial zones that bring together plastic processors and related businesses. By consolidating manufacturing capacities and providing common infrastructure, they seek to encourage investment, production, exports and employment.

Under the scheme, the Government provides grants covering up to 50% of the project cost, subject to a maximum of ₹40 crore per project. The remaining cost is met by State Governments or their agencies, beneficiary industries and other stakeholders.

The scheme also encourages environmentally sustainable growth through waste management and recycling initiatives.

A total of 10 Plastic Parks have been approved across India. Four have achieved 100% infrastructure completion, including three completed during 2025–26.

Research, innovation and technology development

As industrial applications become more specialised, research and innovation are essential for developing advanced materials, improving manufacturing processes and creating new products.

Government initiatives are supporting research through funding, institutional partnerships and industry-oriented programmes.

Chemical Promotion and Development Scheme

The Chemical Promotion and Development Scheme (CPDS) supports the growth of the chemicals and petrochemicals industry through research promotion, knowledge creation and dissemination.

It provides support for studies, surveys, databases, workshops, seminars and promotional activities. The scheme also encourages innovation by recognising outstanding contributions to the sector and providing grants-in-aid to eligible organisations, industry associations and other entities.

An important component is farmer training on the safe and judicious use of pesticides.

Since 2016, public sector undertaking HIL (India) Limited has conducted training programmes under CPDS. The Institute of Pesticide Formulation Technology (IPFT) joined the initiative in 2022–23.

These programmes promote Integrated Pest Management practices and aim to minimise pesticide residues in food grains, edible oils, fruits and vegetables. As of August 2026, more than 250 programmes had benefited over one lakh farmers across the country.

Research, Development and Innovation Scheme

Launched in November 2025, the Research, Development and Innovation (RDI) Scheme has a corpus of ₹1 lakh crore to encourage private-sector investment in research and innovation.

It provides long-term financing and refinancing on favourable terms for transformative projects, with the objective of accelerating advanced technology adoption, strengthening industrial competitiveness and promoting self-reliance in critical and emerging technologies.

On October 8, 2026, Advanced Chemicals, Petrochemicals and Material Technologies was added as an eligible technology area under the scheme.

This inclusion is expected to support research and the development of indigenous technologies for advanced industrial applications, strengthening domestic capabilities in specialised chemicals and materials.

CIPET: Developing technical skills and industrial expertise

The Central Institute of Petrochemicals Engineering & Technology (CIPET) plays an important role in developing skilled professionals and providing technical support to India’s petrochemical and allied industries.

As a centrally funded technical higher education institution, CIPET undertakes activities covering Skill Development, Technology Support, Academic and Research (STAR).

Its infrastructure includes specialised facilities such as: Centre for Skilling and Technical Support (CSTS); Plastic Waste Management Centre (PWMC); School of Advance Research in Petrochemicals (SARP); Advance Research School for Technology and Product Simulation (ARSTPS); and Advance Polymer Design and Development Research Laboratory (APDDRL).

CIPET’s network has expanded to 51 centres, including 19 established since 2014. Three centres are dedicated to plastic waste management.

The institution has trained nearly 6.72 lakh skilled professionals, including more than 5.21 lakh during 2014–24. It also completed 8.53 lakh Technology Support Service assignments during the same period.

Through technical education, specialised training and industrial support, CIPET contributes to workforce development, product innovation and the technological capabilities of the sector.

Centres of Excellence

Centres of Excellence have been established to advance existing technologies, strengthen research and develop new industrial applications.

Together, 18 such centres have filed 85 patents, published more than 600 research papers and developed 105 new technologies and products.

These achievements demonstrate the contribution of specialised research institutions to indigenous technology development and industrial innovation.

Quality standards and responsible chemical manufacturing

The expansion of chemical manufacturing must be accompanied by strong quality standards and workplace safety practices. Chemical products and industrial processes require appropriate regulatory oversight to protect consumers, workers and the environment.

Quality Control Orders

The Government has issued Quality Control Orders (QCOs) to promote quality manufacturing, protect consumers and prevent the circulation of substandard imports.

As of August 2026, 37 QCOs were in force, making specified chemical and petrochemical standards mandatory.

Domestic manufacturers and importers covered by these orders must comply with the quality parameters prescribed by the Bureau of Indian Standards (BIS).

These measures seek to improve product reliability, strengthen domestic quality standards and create a more competitive manufacturing environment.

Workplace safety and hazardous chemical management

The safe handling of hazardous chemicals is another important priority for the sector, particularly in industrial facilities where accidents can have serious consequences.

Under the Viksit Bharat@2047 Action Plan, a nationwide training programme has been launched for workers employed in Major Accident Hazardous (MAH) units. It focuses on the safe handling of hazardous chemicals at workplaces and reducing associated risks.

The programme aims to cover all 2,393 MAH units over five years. Each training programme is designed for 100 participants drawn from 50 units, with two employees attending from each unit.

As of August 2026, 21 training programmes had been conducted, with participation from 1,376 industrial units and training provided to 2,441 personnel.

The initiative seeks to improve workplace preparedness, strengthen awareness of chemical hazards and promote safer industrial operations.

How these initiatives support India’s global competitiveness

India’s chemicals and petrochemicals industry is undergoing expansion across manufacturing, investment, infrastructure, research and technical education.

Dedicated industrial regions and chemical parks are intended to attract investment and provide manufacturers with common facilities. Plastic Parks support downstream processing, while research funding and specialised institutions help develop advanced materials and indigenous technologies.

At the same time, quality control measures and workplace safety programmes aim to ensure that industrial growth is responsible and sustainable.

The sector’s international engagement, highlighted by India Chem 2026, also provides opportunities to connect domestic manufacturers with global investors, technology providers and markets.

With an estimated value of USD 220 billion and projections of USD 300 billion by 2030 and USD 1 trillion by 2040, the chemicals and petrochemicals industry has significant potential to contribute to India’s manufacturing ambitions.

The broader objective is to move beyond expanding production volumes towards greater domestic value addition, advanced technological capabilities, sustainable manufacturing and a stronger position in global chemical value chains.

(PIB)