At present 30 percent of India’s chemical requirements are fulfilled by imports and it presents ample opportunity for import substitution and thus the government policy of self-reliance is a step in the right direction, says Rajendra Gogri, Chairman and Managing Director, Aarti Industries Limited.

"China plus one strategy is likely to increase the demand from India and thus boost exports. Through right policy measures, the government should chalk out a customized plan for each sub-sector within the chemical industry. Since each sub sector has its own unique characteristics and business models, one size fits all approach doesn't not work here. Government should work on national chemical policy, the first draft of which was published in 2014. It has not yet come out and materialized. Therefore, to attract global players, the government should come out with a clear policy and action plan to ensure stability,” says Rajendra Gogri.

Gogri was sharing his thoughts at the panel discussion on the first day of the ‘NextGen Chemicals & Petrochemicals Summit 2021’ organized by Indian Chemical News on October 7-8, 2021. The discussion titled ‘Policy changes to make Indian chemical industry globally attractive’ was moderated by Pravin Prashant, Editor, Indian Chemical News.

The Chief Guest at the inaugural session, Bhagwanth Khuba, Minister of State for Chemicals and Fertilizers, New and Renewable Energy, Government of India was highly appreciative of the initiative taken by the Indian Chemical News. He exhorted the industry leaders to strengthen the chemical industry, and at the same time, he assured that the government intends to do its best for the manufacturing industry citing tremendous growth opportunities.

“We want to implement industry friendly policies and I am personally keen to bring changes to help the sector to grow. In this direction, the Department of Chemicals and Petrochemicals (DCPC) will be holding a consultation meeting with the industry on 20th October, 2021. We look forward to your views and also try to accommodate the issues such as registration and environmental clearances,” added Khuba.

“Policies play a very important role in shaping the chemical industry’s future and it is heartening to see that the Prime Minister has himself laid thrust on the Aatmanirbhar (self-reliant) India. In order to capture the pole position globally, we must work as an integrated and differentiated value player where we should envision and build our capabilities with integrated downstream products or solutions. Consequently, while we do this, I am confident that we will be able to create a very good value proposition which would be hard to compete with. If we see the trade disruption globally, there is a lot going on and we should tap the opportunity with all agility before someone else does it. Production linked incentives are one of the encouraging steps towards becoming a global hub,” says Rahul Tikoo, Managing Director – India Sub-continent & Polyurethanes-India Business, Huntsman Corporation. 

“Indian chemical industry has worked very hard to achieve what it is today. Among many of the questions that are asked to us is whether you will be able to maintain the output? One thing that is not taken into consideration is that capital plays an important role in this. If this area is left unattended, it may be catastrophic in the longer run. As a company, our quarters have been volatile, with few at high and few at bottom. For us, resource security, favorable policy and capital are important for growth to keep coming. Investing in quality infrastructure and sustainability will take us into the big league but it will take 7-10 years. It is for the industry, government and policymakers to see if they want to register growth in a mercurial manner within a short time or in a balanced way for a longer term?,” says Maulik Mehta, CEO & Executive Director, Deepak Nitrite Limited.

“We have witnessed good growth in the chemical industry on account of the encouraging policies by the government. The current market size of the chemical market globally is US $4.9 trillion and out of that India has a market share of just 4 percent whereas China has 36 percent. To expand our size, we have three major options: As we know there is a huge consumption in India, it opens up opportunities that we need to tap quickly.  We must know that there are many foreign multinationals who are setting up plants in countries like Malaysia and that will impact demand in India. Second is the implementation of GST in the energy sector. The one nation, one tariff will help in a uniformity and thus streamline operations. Third is that the faster environment clearance for pharmaceuticals should be replicated for the chemical sector as well. It will help in attracting the foreign companies and their investments,” says Maulik Patel, Chairman and Managing Director, Meghmani Finechem Limited.

“World is at the cusp of climate change and we are now looking at sustainability and low carbon materials that are gentler on the environment. The chemical industry is a marvelous industry because the world needs chemicals but the way we look at it is that green chemistry and renewable chemistry must take the centre-stage now. Many countries are encouraging such initiatives through incentives. In India too, we need to focus in this direction and rightly so, our government has set the biofuel blending targets. While we are taking steps, we need to accelerate our pace now,” says Samir Somaiya, Chairman and Managing Director, Godavari Biorefineries Limited.

“India has now become the second largest producer of food, vegetables and cereals. We are producing seven times more than 40 years back and yet can do much better. However, it is also a fact that despite erratic rain, agrochemical usage in India is possibly the lowest in the world. We use only 4 billion worth of agrochemicals whereas there are countries that use agrochemicals worth 12 billion and still produce less. Our association members are managing Rs. 30,000 crore and our target is to take it to Rs. 60,000 crore and then to US $1 billion. Globally, it is a US $71 billion market and policy corrections can help us to increase our share in the next 5-7 year time. One of the worrying trends in recent times has been the import of the chemicals in bulk by many multinational companies who then repackage it and export. It adversely affects Indian companies who have put huge investments. We believe that sky's the limit and we should be able to capture 33 percent of the global market if we are able to capture the opportunity through policy encouragement," says Deepak Shah, Chairman, Crop Care Federation of India and Chairman Sulphur Mills Limited.

“The challenge for the Indian chemical and petrochemical industry is how to replace the Chinese supply, as the whole world is looking at us. We should strive for a sustainable business model and also reform the power generation and distribution mechanism as without it this industry can’t grow. While the infrastructure at the ports has improved drastically, the logistics costs have gone high and containers as well as ships are delayed. We need to look into the issues at ports such as Visakhapatnam or Dahej and upgrade them to global level. Third important point is the need for enough ethylene cracker plants. The right base feedstock availability can create a big opportunity for more production. In terms of quality, we need to upgrade our regulatory system to keep a check on cheap imports,” says Kapil Malhotra, President, Alkali Manufacturers Association of India and Global Business Unit Head, Gujarat Fluorochemicals Limited (GFL).

Delivering his welcome speech, Pravin Prashant, Editor, Indian Chemical News, said: “Moving in the big league is not just the theme of the event but we want India to move ahead in chemicals, petrochemicals, pharmaceuticals, and energy sectors. This is not a herculean task if all the stakeholders join hands to make India self-reliant. Under the leadership of Prime Minister Narendra Modi, industry has already done exceedingly well even during Covid times. Indian industry that stood at US $178 billion in 2019, is expected to reach US $304 billion by 2025 by registering a CAGR of 9.3 percent. The Indian government has recognized the chemical sector as a key growth sector and forecasted its contribution to 25% of the overall GDP. It is good to find that the Ministry of Chemicals and Petrochemicals is eager to chalk out a strategy to address the problem areas. It could bring a sea change in the working of the industry and result in increasing FDI.”

The idea behind ‘NextGen Chemicals & Petrochemicals Summit 2021’ was to provide a premier forum for the high quality deliberations. For two days, the event witnessed over eleven sessions that covered a lot of topical issues concerning chemicals, petrochemicals, pharmaceuticals, energy, digitalization and much more. Apart from offering insights from who’s who of the chemical and petrochemical industry, it provided ample networking opportunities with industry experts and solution providers.