Looking around, we can see that we are inextricably linked to India’s chemical industry. Whether it’s drugs, cleaning agents, synthetic clothing or thermoplastic furniture, everything around us is a direct or indirect product of the chemical industry. The chemical industry produces more than 70000 kinds of commercial chemical products annually, ranking sixth in the world and third in Asia. Although India’s chemical industry has many opportunities to help it develop and expand internationally, there are also many challenges hindering its development. Let’s take a look at the opportunities and challenges facing Indian chemical manufacturer today.
Challenges facing Indian chemical manufacturers
lack raw materials
Raw materials or raw materials used in organic and inorganic chemical industry are difficult to buy in the market. Compared with the Middle East, China and other Southeast Asian countries, the prices of main raw materials such as naphtha and natural gas are very high in India. The lack of raw materials makes India less competitive in the global chemical market.
Easing of cheap imports
One of the biggest challenges facing India’s chemical industry is that cheaper chemicals are easily available through imports. The Indian government has eliminated tariffs and other import barriers on the import of various chemicals. This has led to an increase in imports of various chemicals on the global market at cheaper prices.
Remote location and insufficient infrastructure
India’s major chemical industry has been established along the west coast of Gujarat, and the areas with the greatest demand for chemicals are southern and eastern India. This increases the cost of logistics and transportation, thus increasing the total cost of chemicals. In addition, the industry faces some infrastructure problems. Inadequate port facilities, poor pipeline connectivity, inadequate power supply and even chaotic railway stations make it difficult for the chemical industry to obtain raw materials from various chemical and chemical suppliers in India.
Complex regulatory issues and high taxes
Heavy taxes on various raw materials exceed taxes on manufactured goods. This hinders India’s chemical industry from producing more chemicals because of the high prices of raw materials and encourages the import of the same chemicals because the tax on imported finished products is negligible. In addition, the regulatory process is very complex, and a large number of certificates and licenses are required to establish a chemical industry in India.
Opportunities for Indian chemical industry
Increasing demand for value added products
Due to various environmental problems, the demand for biodegradable polymers, high-performance plastics and other value-added chemical products is expected to increase in the future. This is a great opportunity for Indian chemical companies to start focusing on the growing value-added demand for chemical products. As long as more efforts are made in R & D, value-added products will become a huge chemical business opportunity for Indian companies.
Expanding exports to emerging markets
Emerging countries in Africa, the Middle East and the Asia Pacific region offer another golden opportunity for India’s chemical industry. Compared with the developed countries in North America and Europe, these countries are developing faster, which provides more export opportunities for India’s large and small chemical manufacturers. At present, India’s chemical exports account for only 2% of the global market; the growth of these emerging markets will open new export opportunities for India.
India is inherently rich in coal. Coal gasification is an excellent opportunity for the Indian chemical industry to use gasification technology to increase the output of petrochemical and chemical products. The demand for petrochemical products has increased, and the use of coal gasification to produce more and more chemical products and petrochemical products will be a good opportunity to meet this growing demand, which was met by increasing imports.
Reversing SEZs in global markets
Setting up chemical plants in special economic zones in Myanmar, Iran and Mozambique will bring new opportunities to India, which has been looking for cheap raw materials for its chemical industry. The establishment of chemical plants in these economic zones will allow cheap, easy and duty-free import of raw materials for further use.