The Indian chemical industry needs to accelerate its domestic production by 140% to help the sector grow to $300 billion according to recently released whitepaper by BCG.
According to the white paper, the chemical industry needs to focus on 4 key priority areas - Accelerate production capacity; Streamlining day-to-day operations; Structurally upgrade technical capability; and Enhance competitiveness of domestic players.
Commenting on the whitepaper, Amit Gandhi, Managing Director and Partner, BCG India’s lead for Chemicals said, “The Indian chemical industry needs to accelerate its domestic production capacity by as much as 140 percent to help the sector grow to US $300 billion. This will require significant foreign capital and knowhow, which could be accelerated through a targeted outreach program to foreign players. A boost could be provided in the form of investment support and Production Linked Incentive (PLI) schemes.”
The whitepaper further showcases the economic impact of achieving this by reversing India’s chemical trade deficit into a trade surplus, and the addition of up to 10 million direct and indirect jobs.
Talking about white paper, Vijay Sankar, President, ICC said, “The Indian Chemical Industry is in a sweet spot of unrealized potential and tremendous opportunity. It should experience significant growth in the 2020s, driven by rising household incomes, the existing consumption gap & a huge export opportunity."
"While the shift will help increase base consumption across all industries, there will be a marked shift to higher specialty chemical consumption as categories premiumize. Currently, a large part of the domestic demand for specialty and downstream chemicals is served via imports—offering large headroom for local production. In addition, changing geopolitics offer the opportunity for India to emerge as a global production and export powerhouse,” added Sankar.
Commenting on BCG whitepaper, Ravi Goenka, Vice President, ICC said, “The Indian chemical industry holds a prominent position on the global stage—it is the sixth largest in the world, and the third largest in Asia. It has, however, perennially been the latent potential sector. The 2020s will change that, particularly on our global market competitiveness. India has a strong cost and quality position, with the lowest labor cost among the top six global chemical countries. This is a material plus for any major production hub. Furthermore, India’s proximity to large South East Asian and Middle Eastern markets gives it a significant geographic advantage.”
At Indian Chemical Council’s (ICC) flagship annual event, ICC and Boston Consulting Group unveiled their whitepaper for the Chemicals industry: “Making India A Global Chemicals Powerhouse: Vision for the 2020s”. The whitepaper highlights the significant latent potential in the Indian chemicals industry, which could more than double to around US $300 billion by 2025 with the right combination of domestic and export tailwinds.