India’s Chemicals and Petrochemicals Industry Projected to Reach $300 Billion by 2030

India is currently the world's sixth-largest producer of chemicals and the fourth-largest in Asia. The sector supplies a wide range of industries, including pharmaceuticals, textiles, construction, automobiles, electronics and consumer goods.

The government permits 100 per cent foreign direct investment (FDI) through the automatic route in most segments of the chemicals industry. This allows foreign investors to invest without seeking prior government approval.

FDI inflows into the sector totalled Rs 1,04,895 crore between 2014 and 2026, more than twice the Rs 45,240 crore recorded during the preceding decade, from 2004 to 2014.

Production of major chemicals and petrochemicals also expanded, rising from 45,638 thousand metric tonnes in 2015-16 to 58,617 thousand metric tonnes in 2024-25.

India Strengthens Its Position in Global Chemical Markets

India has established a significant presence in specialised chemical segments. It is the world's second-largest manufacturer and exporter of dyes and the third-largest exporter of agrochemicals.

The sector comprises approximately 13,000 large-scale industrial units and 4.45 lakh micro, small and medium enterprises (MSMEs).

Government initiatives are aimed at expanding manufacturing capacity, developing specialised industrial hubs, improving infrastructure and encouraging research and investment. These measures are also intended to strengthen India's participation in global value chains.

Three Dedicated Chemical Parks Planned

The Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) Scheme, approved in July 2026, aims to establish three dedicated chemical parks.

Each park will cover a minimum area of eight square kilometres, equivalent to approximately 2,000 acres. The Centre will provide grants of up to Rs 1,000 crore for each park, subject to a minimum contribution of Rs 500 crore from the respective state government.

The scheme has a total financial allocation of Rs 3,030 crore. Of this amount, Rs 3,000 crore has been earmarked for common infrastructure and basic utilities, while Rs 30 crore will cover administrative expenses.

The programme will run for five years, from the financial year 2026-27 to 2030-31.

Research and Innovation to Receive Further Support

Another key initiative is the Research, Development and Innovation (RDI) Scheme, launched in November 2025 with a corpus of Rs 1 lakh crore.

The scheme is designed to encourage private-sector investment in research and innovation by offering long-term financing and refinancing on favourable terms for transformative projects.

Its objectives include accelerating the adoption of advanced technologies, improving industrial competitiveness and promoting self-reliance in critical and emerging technology areas.

Together, these initiatives are intended to expand domestic manufacturing capabilities, strengthen research infrastructure and support the industry's long-term growth ambitions.