Govt says Rs 10 lakh cr investment opportunity seen in chemical industry by 2025
The government on Wednesday said the Indian chemical industry has an opportunity to attract investment of about Rs 10 lakh crore by 2025 as the country offers a location advantage.
Opportunities exist in the entire value chain and across the sector. There are opportunities for investment in PVC, methanol value chain, among others, it said.
''We are aware that the chemical industry is a critical and integral part of the growing Indian economy and present enormous opportunities of attracting about Rs 10 lakh crore of investment by 2025 and creating jobs for lakhs of persons,'' Chemicals and Fertilizers Minister D V Sadanand Gowda said while addressing India-Chem 2021 event organised by Ficci.
Coupled with enormous opportunities and high potential of the Indian chemical industry, makes it a preferred investment destination globally, he said.
India as a market also offers a location advantage as the Indian peninsula is centrally located between the East and West of Asia. It is also the centre of the trans-Indian ocean routes, which connect the European countries in the west and counties of East Asia, he added.
Further, Gowda said the changing geopolitical scenario and realignment of global supply chain preference from China to elsewhere can provide India with a platform for converting challenges into opportunities.
The minister also mentioned that the 2021-22 budget announcement has been highly encouraging for the chemical and petrochemical sectors.
Announcements such as production linked schemes for key end-use sectors, doubling of outlay for micro-irrigation, emphasis on infrastructure spending, reduction in import duty on feedstock such as Naphtha, an increase in import duty on builder ware of plastic and polycarbonate have set the tone for the rapid growth of the sector in the years to come, he added.
Stating that the government has initiated a host of structural reforms in the sector in the last few years, the minister said the government on a consistent basis is taking measures to provide impetus in the chemical sector.
Progressive review and rationalisation of the customs duty is a key step in this regard, which will enhance the competitiveness of the chemical sector by providing a level playing field to the domestic producers, he said.
''It is also expected to increase the utilisation of our domestic capacity along with attracting investment for building up new manufacturing capacities,'' he said, adding that continuous efforts are being made to rationalise and expedite the regulatory clearances from various central and state government agencies.
According to Chemicals and Petrochemicals Secretary Yogendra Tripathi, the Indian chemical industry market has been growing every year at about 9 per cent in the last five years.
''All estimates indicate that it is likely to grow 11 per cent in the next five years. The market size of the chemical sector in the Indian context is likely to jump from USD 178 billion to USD 300 billion in 2025,'' he said.
Demographic dividend, lower per capita consumption, increasing export demand and enabling government initiatives are the key growth drivers in the chemical industry, he added.
Stating that opportunities exist across the whole value chain and the sector, the secretary said there are opportunities in PVC, methanol value chain due to the huge gap between demand and supply. It offers tremendous opportunities for the further establishment of greenfield manufacturing units.
He also said the government has been consistently looking at policy options for rationalising duty structure with a view to encourage domestic production further.
So far, 10 projects with an estimated investment of USD 70 million are being implemented in the petrochemical sector. There are 8-9 projects, which are under consideration by major players for future investment.
''The projects which are under implementation will be completed by 2024,'' he said and urged the industry players having projects under consideration to firm up their plan.
Sharing about state perspective, Andhra Pradesh Industries Minister Mekapati Goutham Reddy said the current consumption of chemicals in India is one-tenth of the world average, indicating that the demand potential is yet to be realised.
Covering more than 80,000 commercial products, the Indian chemical industry is broadly classified into bulk speciality chemicals, agrochemicals, petrochemicals, polymers and fertilisers.
Odisha Industries Minister Dibya Sankar Mishra also spoke on the occasion. Minister of State for Chemicals and Fertilisers Mansukh Mandaviya attended the event virtually.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)