India's Chemicals and Petrochemicals Industry

How the chemicals industry supplies everything from plastics to dyes and drug ingredients, India's strengths, and the challenges of competing with China.

Chemicals are the building blocks of many products: plastics, fertilisers, paints, dyes, detergents, pharmaceuticals and textiles.

Types of chemicals

Bulk or commodity chemicals: produced in large volumes, such as caustic soda and basic petrochemicals.
Petrochemicals: made from oil and gas, such as polymers used in plastics. Reliance is a major producer.
Specialty chemicals: smaller-volume, higher-value chemicals for specific uses, such as agrochemicals, flavours and pharmaceutical intermediates.

India’s strengths

Specialty chemicals: Indian firms have grown as global companies sought suppliers beyond China, especially after Chinese environmental crackdowns around 2017 and later China+1 strategies.
Dyes and agrochemicals, where India is a significant exporter.
Chemical clusters in Gujarat and Maharashtra.

Challenges

Chinese competition: China dominates global chemical production with scale and integrated supply chains.
Feedstock dependence on imported oil and gas.
Safety: the 1984 Bhopal gas tragedy, when methyl isocyanate leaked from a Union Carbide plant, killing thousands, remains one of the world’s worst industrial disasters. Accidents like the 2020 Visakhapatnam styrene gas leak show ongoing risks.
Pollution and environmental clearances.

Policy

The government has considered PLI schemes and petrochemical investment regions to boost the industry.

The specialty supplier

A European agrochemical company, worried about dependence on Chinese suppliers, signs a long-term contract with a Gujarat specialty chemicals maker. The Indian firm expands its plant and hires chemists.

Thinking chemicals are only an industrial concern

Chemicals are in everyday products, and chemical safety affects communities, as Bhopal showed.

Key takeaways

Chemicals include bulk, petrochemical and specialty products.
India has grown in specialty chemicals and agrochemicals.
China's scale is a major competitive challenge.
Safety and pollution, highlighted by Bhopal, remain critical.