India: New Government Policy Fosters Domestic Chemical IndustryDec 12th, 2017
Rajeev Kapoor, the secretary of the Department of Chemicals and Petrochemicals in the Ministry of Chemicals and Fertilizers of India, in his report emphasizes a significant role of the chemical sector in the Indian economy and says that it is a growth engine for the manufacturing industry of the region. According to the government, the Indian chemical industry will annually grow by 8-10% and by 2025 will have gained $300 billion.
To win this objective, the government has created a plan to introduce a new policy to support the domestic chemical producers and restrict imports. Currently, the size of the national chemical sector is estimated at $150-155 billion. The Department expects it to double in size due to the policy targeted at the needs of domestic producers. The key objective is the satisfaction of growing demand for chemicals among national industry plus the reduction of the import dependency. Agrochemical and speciality subsectors are on a stronger track among others.
The industry is still challenged by the biased opinions against petrochemical and plastic products on the part of the Indian consumers. To overcome negativity towards these materials, Kapoor suggests raising the awareness of people about their critical importance for various industries and everyday life. He asks to consider the case of the automobile sector which uses the plastics far less than the global car producers. Therefore, he requests the industry to double down on research activity so that to create innovative products strongly demanded by the end-users.
To assure the feedstock supply and while doing that reduce costs, Kapoor suggests that the chemical producers should place a collective order to buy materials from overseas markets. Another strategy is to rework the current investment policy in the regions. Together with these measures, the secretary says that the environmental regulations should be rationalized. The Department is committed to helping the domestic chemical sector and the commerce ministry to solve the issues with free trade agreements.