Ease of Doing Business for MSMEs: The government had asked the industry to suggest if policy interventions are needed to help the chemicals sector grow as it has the potential to scale from $163 million to $304 million by 2025.
Ease of Doing Business for MSMEs: Calling the future of India to be lying in the MSME sector, Commerce Minister Piyush Goyal has said that chemicals and allied sectors hasn’t tapped performed to its true potential and also urged the sector for “taking up new challenges, set higher goals and aspire for extraordinary results.” The minister added that while the chemicals and allied sectors’ exports have a share of 10 per cent of the global chemical market, India should aspire to be the top exporter of products from this sector.
“Chemical industry has a very low share of the global chemical business. So the minister is right to say that the sector has a lot of potential because it has implications on almost every industry including FMCG, automotive, etc,” Ravi Kapoor, former President, Indian Chemicals Council told Financial Express Online.
The sector constitutes around 20-30 per cent of MSMEs for which securing capital from banks much like in other sectors is a challenge, apart from challenges around infrastructure, land availability etc., according to Kapoor. “For MSMEs, the biggest problem is capital. Also, the government should engage with industry and academia for technology adoption and research, developing IP among MSMEs. So the government needs to add value because it is tough for MSMEs to do that by themselves,” he added.
The minister’s comments come nearly a month after the government had highlighted the “meagre” FDI in the chemical sector at only 9 per cent of the total inflow in the country despite favourable policies. Chemicals and Fertiliser Minister D V Sadananda Gowda at a CII event last month asked the industry to suggest if policy interventions are needed to help the sector grow as the sector has the potential to scale from $163 million to $304 million by 2025.
“Indian chemical industry’s size is only 3 per cent of the global industry. The big problem we are facing today is in getting the environmental and statutory permission because of certain requirements from the National Green Tribunal. The units which are compliant should be allowed to function properly etc.,” said Kapoor. The chemicals minister had last month assured that steps will be taken against the delay in getting clearances and the rollback of tax incentive for research and development (R&D) based on feedback from stakeholders.