Cabinet Clears ₹3,030 Crore Scheme for Three Chemical Parks

The parks will include water supply and distribution systems, steam generation networks, solvent recovery and distillation units, interconnected pipelines, logistics support and warehousing facilities.

The Union Cabinet has approved the Bharat Audyogik Vikas Yojana Rasayan, or BHAVYA-Rasayan Scheme, to develop three dedicated Chemical Parks across India. Announced in the Union Budget for 2026-27, the programme is intended to strengthen domestic chemical manufacturing, attract investment and build facilities that can support industries from raw materials to finished products.

The five-year scheme will run from 2026-27 to 2030-31 with a total outlay of ₹3,030 crore. Of this, ₹3,000 crore will fund common infrastructure and basic utilities inside the parks, while ₹30 crore has been set aside for administration.

Centre and states will share development costs

The Centre will provide a grant of up to ₹1,000 crore for each Chemical Park. State governments selected under the challenge-based process will need to contribute at least ₹500 crore per park.

Each proposed site must have a minimum contiguous area of eight square kilometres, or 2,000 acres, of encumbrance-free land. The state-led parks will be designed as plug-and-play industrial zones, helping chemical companies access essential facilities without having to build every service on their own.

Shared systems can lower production costs

The parks will include water supply and distribution systems, steam generation networks, solvent recovery and distillation units, interconnected pipelines, logistics support and warehousing facilities.

Shared infrastructure is expected to reduce logistics and operating costs for chemical manufacturers, particularly for upstream, downstream and ancillary units that depend on efficient handling of raw materials, intermediates and finished products. The government expects this model to improve the sector's cost competitiveness and strengthen its position in global value chains.

Environmental facilities form a core part of the plan

Chemical manufacturing requires careful management of effluents and hazardous waste. Each park will include centralised Common Effluent Treatment Plants, Treatment, Storage and Disposal Facilities, and hazardous-waste management infrastructure.

These shared systems are expected to make compliance with environmental regulations easier for companies while supporting cleaner industrial growth. The scheme places environmental infrastructure alongside production needs, recognising that reliable waste treatment is essential for a modern chemical manufacturing ecosystem.

Wider industries could benefit from new capacity

Chemicals and petrochemicals are used across agriculture, textiles, pharmaceuticals, nutraceuticals, construction, automobiles and electronics. Stronger domestic production capacity could therefore support a wider network of manufacturing industries and reduce dependence on imports for key inputs.

The government expects the scheme to bring domestic and foreign investment, create employment and help India expand chemical exports. By supporting integrated industrial clusters, BHAVYA-Rasayan is also intended to contribute to the country's Atmanirbhar Bharat goals and its wider Viksit Bharat 2047 vision.