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Tuesday, March 13, 2018

Indian Chemical Industry

Chemical industry in India is the third largest producer in Asia and sixth largest in the world. Indian chemical industry is expected to double its share in global chemical industry to 5-6% by 2021 registering growth of 8-9% in the next decade. Number of Multi National Companies are focusing on India for their manufacturing hub. Lower cost of labor, availability of key raw materials, large consumer markets and adaptability to technology are some of main attractions for having a strong manufacturing base in India.

Growth of the Industry depend on
  • Technology transfer: The key aspect of the chemical industry, especially specialty chemicals and agricultural chemicals, is the technology based on which the performance / yield is measured. While Government has provided tax incentives for R&D, it is essential to support / fund the technology acquired by domestic industries for rising to the global standards. Government should consider a budgetary allocation for partially funding such technology which would be in a larger interest of the economy. Simultaneously, government would also need to put a better patent protection road map in place to avoid infringement of technology.
  • National Chemical Policy: National Chemical Policy is being proposed for a long period which needs to be formulated to provide enabling environment, infrastructure and duty structure for the Chemical industry in the country. It will place a framework for promoting safety & security and R&D in the sector. This will help India’s chemical industry to grow and become more competitive.

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