The Indian chemical industry could see exports rise to $81 billion by 2030. It produces more than 80,000 products — with inorganic, petrochemicals and speciality chemicals as the three key attractive segments for manufacturers. Projections shared by NITI Aayog also suggest that market consumption will reach $290 billion to $310 billion by FY30.
“India’s high import requirements highlight a significant shortfall in domestic production, underscoring the need to enhance domestic manufacturing capabilities. By addressing capacity gaps, India can transform its chemicals industry and emerge as a key global player,” the NITI Aayog report noted.
India is a net exporter of agrochemicals and colourants — accounting for nearly 59% of the specialty chemicals industry total market size domestically. The textile chemicals and construction chemicals segments operate mostly via domestic production, and India also remains a net exporter of polymer additives and surfactants segments. But the policy think tank highlighted a trade deficit for both inorganic chemicals and petrochemicals due to limited feedstock materials and minerals.
$81 billion export target
The report said the chemicals industry could target $45 billion in speciality chemical exports, $5 billion to $10 billion in inorganic chemical exports and $26 billion in petrochemical exports by 2030.
The industry would need to achieve 10% to 11% consumption CAGR (Compound Annual Growth Rate) (CAGR) over the next five fiscal years and 14 per cent production CAGR to meet these targets. The NITI Aayog report estimated that the country would see chemicals market consumption reach $290 to $310 billion by fiscal 2030 — accounting for around 5% to 6% of global chemical consumption.
What are the key hurdles?
The report noted that the Indian chemicals industry was “hindered by structural constraints that limit its growth and integration into global value chains”. It stressed the need for government intervention to unlock its full potential. The key challenges highlighted in the NITI Aayog report included a high reliance on imports and a notable trade deficit that undermined the industry’s competitiveness and sustainability.
According to the report, feedstock allocation is also skewed towards producing bulk commodities, rather than higher value chemicals in the Indian petrochemical industry. NITI Aayog also stressed the need for “targeted government support” to address the imbalance before the sector could become more competitive globally. The think tank suggested:
- Viability gap funding to encourage investments in downstream, higher-value chemical manufacturing
- Incentives for producing complex derivatives, such as ethylbenzene, cumene, cyclohexane and nitrobenzene, which have higher value-added potential
Import dependence and trade deficit
India aims to balance imports of petrochemicals and inorganic chemicals with $20 billion to $25 billion in specialty chemical exports. The country maintains a high import dependency for raw materials — purchasing a majority of its crude oil, active pharmaceutical ingredients and even vital intermediates like methanol, acetic acid, and phenol. Industries such as semiconductors, solar panels, and advanced plastics also retain a heavy dependence on imported, high-purity chemicals.
According to the NITI Aayog report, China, the US, Germany, India and France dominate the specialty chemical export market due to their abundance of low-cost raw materials, strong process engineering capabilities and low-cost manufacturing capabilities. India holds an 8% share (as of 2024) because of its “increased production capacity, technological
advancement and favourable government policies” — indicating a major opportunity for growth. NITI Aayog added that it was now essential to improve domestic production, which could boost India’s share in the global chemicals value chain and transform the country into a net zero importer.
“This share is moderate mainly due to intense international competition and a strong focus on the domestic market. As a net exporter of specialty chemicals, India is poised to see an increase in exports on account of its cost competitiveness, rising international demand and technological advancement. The global shift away from China creates new opportunities for Indian exporters,” the report reiterated.
But India cannot wholly escape a trade deficit in basic petrochemicals and inorganic chemicals.
Limited feedstock materials and minerals contributed to a $31 billion trade deficit in 2023 — while infrastructure gaps, outdated industrial clusters, and high logistics costs created a cost disadvantage compared to global peers. A PIB report in 2025 had also flagged low investment in research and developent as a hindrance to indigenous innovation in high-value chemicals. Regulatory delays, especially in environmental clearances, further stifle industrial agility. The sector has also faced a significant shortfall in skilled professionals in recent years.
What’s next for the chemicals sector?
According to the NITI Aayog report, the industry has “significant potential” to enhance domestic value addition by expanding downstream production and improving feedstock utilisation. The government think tank stressed the need to promote domestic manufacturing, investments in competitiveness, and strategic use of FTAs to help reduce import dependence, strengthen downstream capabilities, and support sustainable industry growth.
“A robust manufacturing base is essential for promoting self-reliance, reducing import dependence, and increasing value addition, particularly in critical sectors such as electronics, defense, and renewable energy. As India strives to become a $30 trillion economy by 2047, the manufacturing sector is expected to play a pivotal role in achieving this vision, driving both industrial growth and social progress,” the report added.