India’s chemical and petrochemical industry, currently valued at approximately 220 billion dollars, could reach 300 billion dollars by 2030 and 1 trillion dollars by 2040. According to a fact sheet released by the government, India is continuously strengthening its position in the global chemical industry, and this sector is becoming a significant foundation for the country’s industrial and manufacturing growth.
The fact sheet states that India is currently the sixth-largest chemical producer in the world and the fourth-largest producer in Asia. Products from this sector are used in various industries, including pharmaceuticals, textiles, construction, automobiles, electronics, and consumer goods. The government has allowed 100 percent foreign direct investment (FDI) in most chemical sectors through the automatic route, which does not require prior government approval for incoming foreign investments.
As a result, between 2014 and 2026, FDI of 1,04,895 crore rupees has come into this sector, which is more than double the 45,240 crore rupees received from 2004 to 2014. According to the fact sheet, the production of major chemicals and petrochemical products is expected to increase from 45,638 thousand metric tons in 2015-16 to 58,617 thousand metric tons by 2024-25. This growth is attributed to the expansion of production capacity, the development of specialized manufacturing hubs, and improvements in infrastructure.
The statement further mentions that India has a strong global presence in the specialty chemicals sector. The country is the second-largest dye producer and exporter in the world and ranks third in the export of agricultural chemicals. Currently, approximately 13,000 large industries and 4.45 lakh micro, small, and medium enterprises (MSMEs) are operational in this sector.
The government is implementing several new initiatives to further accelerate this sector, including dedicated chemical parks, schemes promoting research and innovation, and measures to encourage quality and investment. These aim to strengthen India’s participation in global value chains. Under the India Industrial Development Scheme for Chemicals (Grand Chemicals) approved in July 2026, three special chemical parks will be established in the country.
Each park will cover an area of at least 8 square kilometers (approximately 2,000 acres). The central government will provide assistance of up to 1,000 crore rupees for each park, while the respective state government will need to contribute at least 500 crore rupees. The total financial provision for this scheme is 3,030 crore rupees, of which 3,000 crore rupees are allocated for the development of infrastructure and common facilities, and 30 crore rupees for administrative expenses.
This scheme will be implemented for five years from the financial year 2026-27 to 2030-31. Additionally, a fund of 1 lakh crore rupees has been created for the research, development, and innovation (RDI) scheme launched in November 2025, aimed at promoting private sector research and innovation investment. This scheme provides long-term financing and refinancing facilities to help adopt advanced technologies, enhance industrial competitiveness, and achieve self-reliance in critical and emerging technologies.
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