The Department of Chemicals and Petrochemicals (DCPC) recently convened a meeting to discuss daft position paper prepared by the department for framing ‘National Policy on Chemicals’. The meeting, chaired by secretary (C&PC), was attended by the senior officials of the department, CHEMEXCIL and DIPP. During the meeting, it was explained that chemical industry plays an important role in the economic development of the country, accounts for 7% of GDP of India and share of chemical industry in exports basket of the country is about 10%. The meeting highlighted the growth potential of the chemical industry and discussed challenges and opportunities for the sector. GROWTH POTENTIAL: The chemical sector is stated to be net foreign exchange earner and having significant participation by the SME sector. At present, the SME sector consists of about 40,000 units whereas organised sector consists of 1,000 -1,500 units. The present size of the chemical sector is US$108 billion. With current initiatives of industry and government, the Indian chemical industry could grow at 11% per annum to reach size of US$310 billion by 2020. Since the industry could aspire to grow much more and its growth potential is limited by its aspirations, in this optimistic scenario, while per capita consumption of chemical will increase and also improvement in the export competitiveness, Indian chemical industry could lead to an overall growth rate of 15% and with aspirations targets, the size of the industry would grow to US$440 billion. One of the participants, however, had different opinion. According to him, it may not be possible for the chemical industry to achieve growth rate of 11% or 15% as the GDP growth is only 8%. He stated that factors like elasticity of demand among others have to be analysed before reaching at the growth rate projections. It was explained that presently, per capita consumption of chemicals, dyes, pesticides is very low in India as compared to developed countries, nearly1/8th to 1/10th of global norms. Taking into consideration, the wide domestic market and good domestic potential to Latin American and African countries, there is ample scope for the chemical sector to grow to meet the aspirational targets. Also, Indian chemical industry manufactures diversified chemicals conforming to international quality standards and so, the present share of chemical sector, which is presently at 3%, is expected to increase to 8% by 2020. However, the consumption of synthetic pesticides may not significant growth due to the increased use of organic farming. The chairman clarified that organic farming products constitute very limited part of the overall market and are also expensive. Keeping in view the growing population and requirement of food grain in the country, the growth in consumption of synthetic pesticides will not be affected. On the Complex Regulatory Structure: The members pointed out that the same is applicable to all sectors across the board. It was decided that the specific areas related to chemical regulations need to be identified for which there are multiple authorities for regulating the same issue and needs to be corrected. On the Cluster Issue: It was explained that the chemical sector needs to be established in chemical clusters equipped with Common Effluent Treatment plant (CETP) and common supply of treated water, stream, etc. The growth will be more by developing the chemical sector in dedicated clusters, as investment in common facilities can be shared by SMEs which will place comparatively less financial burden on each. It was also mentioned that strategic Investment Fund can be utilized for promoting such activities. Need for a National Chemical Legislation: It was also mentioned that there is need to establish National chemical legislation on the lines of Japanese, Chinese chemical laws. This will be the national response to REACH legislation brought out by EU which is acting as a non tariff barrier for export of chemicals. It was however felt in the meeting that such legislation may increase the cost of compliance for the industry. This law is also essential for the protection of human health and environment from toxic effects of chemicals. On HRD Issues: It was informed that there is need to upgrade the current chemical departments in universities to the state of art in terms of infrastructure, faculty qualifications, industry interaction and administration. At present, the industry faces the shortage of trained chemical engineers. So, there is a need to set up Central Institute of Chemical Technology (CICT) which would be devoted to academic research activities for the growth of the chemical industry.