Staff Reporter | 02 May, 2008
The Indian chemical industry, one of the fastest growing Industries worldwide, comprises both small and large scale units with nearly 6000 units many of them SMEs. The SME sector is commonly addressed as the engine of a train of economic growth and as the harbinger of innovation and entrepreneurship in the industrial space.

The chemical industry is poised to become the fastest growing industry in the world. The growth performance continues to impress and surge forward. The Indian chemical industry has been growing at the rate of 10-12 percent over the last couple of years.

The basic inorganic and organic chemicals produced provide building block for several down stream industries such as drugs, dyestuffs, paper, synthetic rubber, plastics, polyester, paints, pesticides and detergents.

"Today, India has emerged as a global supplier of dyestuffs and dye intermediates, particularly for reactive, acid, vat and direct dyes. India accounts for approximately 6 percent of the world production," Kamal Nath, the Union Minister for Commerce and Industry, had said this while addressing the members of the CHEMEXCIL at its 33rd and 34th annual export awards function held in Mumbai recently.

About the current year's performance, Mr Nath said, "...for the year 2007-08, we have set the target of Rs 13,100 crore for dyes and dye intermediates, Rs 10,900 crore for basic inorganic, organic and agrochemicals, Rs 2,850 crore for cosmetics, toiletries and agarbattis and Rs 1,250 crore for castor oil, which would register a growth rate of 20 percent over Rs 23,408 crore for 2006-07."

Speaking at a seminar on Chemical Industry for Global Inclusive Growth, organized by CII in November 2007, Arun Ramanathan, Secretary, Department of Chemicals & Petrochemicals, Government of India had observed, "Though we have a long way to go, India has registered a commendable progress in the field of chemicals despite various constraints. We have skilled manpower and good R&D setups to go ahead."

He suggested active involvement of small players in the new applications of chemicals and specifically nanotechnology.

"The chemical industry in India has to reposition accordingly over the next few years," said Alok Gupta, former chairman, CII on the same occasion.

India's chemical industry, valued at close to $ 30 billion, is an important constituent in the overall development of the country acting as the backbone of the manufacturing and agriculture growth.

The industry is one of the most diversified industrial sector covering more than 70,000 commercial products and is one of the significant contributors to this manufacturing growth that the country has been experiencing for the past few years.

The Indian chemical industry however faces several hurdles in the area of capital cost, feedstock prices, and cost of electricity, local taxes and tariffs as compared to the producers in other parts of Asia. Subsidies and other government benefits will encourage the entrepreneurs to join this growing sector specially from the SME sector.