Updated on September 16, 2025 01:18:50 PM
In the present world of intense rivalry for chemical formulations ranging from agricultural to healthcare advancements, the key players in the chemical industry are ruled by quality and skilled engineers, passionately working in bringing a pivotal future vision to the nation. The chemical industry substantially infuses a unique blend of outlook aboard, registered a new rank as 6th largest global export of chemical, provides the broad range of commodities which includes more than 8,000 commercial products, headed by broad sub-segments which classified into bulk chemicals, specialty chemicals, pharmaceuticals, agrochemicals, petrochemicals, polymers and fertilizers.
The world is associated with brilliant chemical engineers, exploring certain distinct ideas to ground smart drives without replicating the same formula for bringing new establishments in the Indian territory. The market size grew with the registered record for about US$ 223 Bn in the year 2023 and it is expected to rise over US$ 383 Bn by the year 2030. The new India’s growth catalyst summarizes its progression roadmap of FDI equity inflows over US$ 21.7 Bn between April 2023- September 2023.
Furthermore, India's growth is predicted to attract investors for investment in chemical industries by PCPIR’s guidelines (petroleum, chemical and petrochemical regions) with the potential value of US$ 420 Bn.
Since it shares about 7 % GDP in the Indian economy and is showcasing the potential to reach about US$ 1 Tn by the year 2040, the assurity to improve market share according to CRISIL report projects, accounted for 3-4% in FY 21-22 to 6% by the year 2026, to stand India confidently with China, to outperform China in the field of engineering. With the aim to incentivize the large scale domestic and international market in developing ACC (Advance Chemistry Cell) batteries, PLI schemes came into process to set up manufacturing units with the capacity to produce 50 GigaWatt Hour (GW h) for 5 years.
The scheme outlay involves ₹ 18,100 crore, addressed by the government to enhance and build up comprehensive advancement in the chemical sector. In the aspect of strong global dyer exporter, India extensively contributes over 16% of the dye stuffs and dye intermediaries. The overall percentage of India to contribute in chemical exports comprises 11.7% shares in the global affinity.
As India is known for being the 3rd largest chemical manufacturer, production and supplier among Asian countries, there is an urgent call for the oil industry which has been undertaken by Reliance Industry to plan to invest Rs. 75,000 crore (US$ 9.06 billion) over the next 5 years to expand the availability of refined oil as raw material for the chemical manufacturing business.
To participate in FDI in the auto components sector, applicants are required to register under the Foreign Investment Facilitation Portal (FIFP). The procedure can be puzzling for any newcomer applicant since it incorporates several terms and conditions without rendering direct access to portals that can generate approvals for FDI.
Table of Content
The objectives of FDI in chemical industry are as follows:
100% FDI is allowed under automatic route in the chemical sector except certain hazardous chemicals.
Many documents are required for FDI in chemical industry which are as follows:
Following are the procedures which required at the time of FDI in the chemical industry:
There are conditions tapping for the procedure of FDI approval which must be understood by investors.
There are numerous significant valid reasons for investors that compel them to invest in FDI in India’s chemical industry:
Following are the benefits of auto components sectors which are listed below:
FDI (Foreign Direct Investments) in the chemical industry introduces boosting of supplies of various chemical commodities abroad along with the formulation of chemicals and compounds which has potential to promote healthier lifestyle and environmental-friendly products. These companies benefited from the financial aid, investor-friendly policies, schemes and initiatives provided by the government to accelerate the progression line in the industry to enable and ensure those who are seeking safe and sound ventures ahead.
Several other factors to consider for investors while investing in chemical-driven industries sector are listed below
Investors must also need to check eligibility criteria for buying investment in India in sectoral companies.
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Frequently Asked Questions
Yes, there is a large opportunity to invest in the chemical sector. The specialty chemicals are said to be the most lucrative segments in the industry. Chemical industry in India have soared 15% in the last 5 years.
The profit margin in the chemical industry in India ranges from 8 to 13 percent in Indian subsidiaries as compared to global profit margins of less than 1 to 6 percent.
SCOMET License is a license which is driven by the use of dual goods and technologies for exports under foreign trade policy. The acronym stands for
Dual-use goods, technologies, chemicals, etc. which can be used for both civil and military applications. The list of items which shows the index containing goods that need export license is called SCOMET list.
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