Chemical industry in India

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India’s chemical industry is a key part of the economy. In 2022 it contributed about 7% of GDP, employed around 5 million people, and offered about 80,000 different chemical products. The sector is the world’s sixth largest chemical producer and third largest in Asia, with a value around $100 billion in 2019. It was also the third largest producer of plastics in 2019.

The industry is diverse and mainly falls into six groups: bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. It also produces many basic, knowledge-based, and specialty chemicals. In 2019, alkali chemicals (like caustic soda, chlorine, and soda ash) made up about 71% of all chemicals produced. Overall, the chemical industry accounts for about 14% of India’s industrial output.

India is a major producer of organic chemicals, which are essential inputs for paints, adhesives, pharmaceuticals, dyes, leather products, and pesticides. Some of the most important basic organic chemicals produced in India are methanol, acetic acid, formaldehyde, pyridine, phenol, alkylamines, ethyl acetate, and acetic anhydride. Six key chemicals—methanol, aniline, alkylamines and derivatives, formaldehyde, acetic acid, and phenol—together form about two-thirds of India’s basic organic chemical production. Indian firms are among the world's largest in several basic organic chemicals.

In the chlor-alkali sector, India mainly produces caustic soda, chlorine, and soda ash, with small amounts of hydrogen. These chemicals are used in soaps and detergents, paper, textiles, aluminum processing, glassmaking, and more. In 2019–2020, this sector produced over 4 million metric tons of alkali chemicals. Tata Chemicals is a global leader in soda ash production.

Specialty chemicals are a growing part of the market. By December 2021, they made up about 22% of India’s total chemical market. India held about 4% of the global specialty chemicals market in 2019, with expectations to reach about 5.5% by 2025. India has several niche specialty chemical companies that are among the world’s leaders in their specific fields.

India also produces petrochemicals, fertilisers, paints and varnishes, glass, perfumes, toiletries, and pharmaceuticals. Gujarat was the leading state for chemical production in 2018.