Chemicals - Future Forecasts

A decade of economic reforms has resulted in major changes in the way the Indian chemical manufacturers work and operate. Individual enterprises have realized their strengths and weaknesses and are gearing up to face the new challenges. Success stories in dyes and agrochemicals have boosted the confidence of Indian manufacturers to take on global competition squarely. Some of the advantages of Indian chemical industry include -

• Due to its low cost infrastructure, the country has huge export potential. According to a recent report, India's chemical exports have the potential to rise US$ 300 billion by 2015. This defines an investment of US$ 50 billion in chemical industry alone.
• The country has the capacity for high value addition being close to Middle East. This is a cheap and ample source for petrochemical feedstock.
• In some categories of chemicals, India does have the advantage for exports (dyes, pharmaceuticals and agrochemicals) by establishing strategic alliances with countries like Russia. With the expertise and know-how available in the country, there is a tremendous export potential in dyestuff and agrochemical market.
• Availability and abundance of raw materials for titanium dioxide and agro-based products, such as castor oil provide an opportunity to yield significant value addition. This, however, would require substituting their exports in raw form by producing high value derivatives.
• The major challenges are pursuit for feedstock and knowledge management. The naphtha-based crackers that have been providing feedstock to the industry traditionally, have now been replaced by new gas-based crackers. Along with China, India pose a stiff competition to the Middle East due to the vibrant exports and huge unexplored reserves of oil and gas. The Govt. of India is acting as a facilitator by establishing LNG terminals and acquiring equity interests in overseas proven oil reserves. This will fuel the fast growth in chemical industry. The govt. is also engaged in the development and formulation of a National Policy on Pharmaceuticals and mega-industrial chemical estates.