By: Rupark Sarswat & V.P. Joshi
Last updated : October 04, 2026 7:49 pm
Green chemistry is no longer just an emerging concept — it has become an essential approach for modern industry, enabling India's transition into the next phase of industrial growth
As the nation's chemical sector steps into a new phase of growth, sustainability has evolved from a strategic aspiration into a business imperative—fundamentally transforming how the industry innovates, manufactures, and competes.
Sustainable green chemistry for industry involves designing chemical products and manufacturing processes that maximize resource efficiency, eliminate hazardous waste, and minimize environmental impact throughout their entire life cycle. It provides a blueprint to reduce carbon footprints, prevent pollution, and ensure long-term economic and ecological viability.
India's Chemical Industry at a Glance
India's chemical industry is entering a new era of growth, where success is no longer defined solely by output and profitability, but by how responsibly and sustainably that growth is achieved. The traditional approach—focused on maximizing production and minimizing costs—is being replaced by a more forward-looking model: one that prioritizes clean innovation, responsible expansion, and long-term value creation. At the core of this transformation is green chemistry—the science of designing chemical products and processes that minimize or eliminate hazardous substances at the source, rather than addressing pollution after it is created. This shift is as much philosophical as it is technical: moving from remediation to prevention, and from reactive risk management to proactive responsibility.
The numbers alone tell a compelling story of scale and ambition.
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$270-300 Bn Market Size (2025) 6th largest chemical producer globally |
$400–450 Bn Projected Market (2030) CAGR of 10–12% through 2027 |
~7% GDP Contribution |
India is now the sixth-largest chemical producer globally and the third largest in Asia.Export earnings have more than doubled in a decade, climbing to Rs. 3,50,000 crore (US$ 39.7 billion) in 2024 compared to Rs. 1,65,000 crore (US$ 18.71 billion) in 2014. Foreign direct investment into the sector reached approximately US$ 844 million in 2024, buoyed by the Production-Linked Incentive (PLI) scheme and the China-plus-one supply chain diversification trend.
The sector's workforce has grown to approximately one million people. By 2040, the industry is projected to reach US$ 1 trillion—a target that makes the strategic choices made today profoundly consequential.
India's specialty and fine chemicals market alone reached US$ 22.36 billion in 2024 and is projected to reach US$ 35.41 billion by 2033, growing at a CAGR of 5.24%. This expansion is being driven by rising demand across pharmaceuticals, agrochemicals, and personal care—sectors where green chemistry credentials are increasingly a baseline requirement, not a premium differentiator.
From Theory to Practice
Over the past decade, green chemistry has evolved from an academic concept into an industrial standard. Companies are no longer treating sustainability as an add-on; instead, they are embedding it across the entire value chain—from raw material selection to end-use application. Research and development, manufacturing, and product design are being reoriented around a single guiding principle: environmental responsibility.
One of the most visible expressions of this shift is the move toward bio-based and renewable raw materials. For generations, the chemical industry leaned heavily on petroleum-derived feedstocks—finite, carbon-intensive, and increasingly scrutinised by regulators and customers alike. Today, plant-based and agricultural-residue feedstocks are emerging as credible, scalable alternatives that reduce emissions without sacrificing performance.
The Industries Being Transformed
The reach of green chemistry spans far beyond the chemical plant itself. Glycols, glycol ethers, acetates, natural gums, esters, amines, and specialty chemicals touch virtually every part of modern industrial life—from automotive coatings and pharmaceutical excipients to personal care formulations and oilfield applications. As these products shift to greener formulations, the sustainability gains cascade across entire value chains.
Key Sectors Adopting Green Chemistry
The global renewable chemicals market, valued at US$ 138.67 billion in 2024, is projected to surpass US$ 314 billion by 2032—growing at a compound annual rate of 11.3 per cent. India is positioned to capture a meaningful share of this expansion, given its abundant agricultural residue base, growing bio-refinery infrastructure, and competitive manufacturing costs. Next-generation feedstocks—derived from lignocellulosic biomass, agricultural waste, algae, and municipal solid waste—are projected to grow global chemical production capacity at a 16 per cent CAGR between 2025 and 2035, reaching over 11 million tonnes by 2035.
Emerging Manufacturing Principle
Process innovation is the other half of the equation. Manufacturers are rethinking how they convert inputs into outputs, guided by principles like atom efficiency and waste minimisation. Digital technologies, automation, and advanced engineering are enabling tighter process control, higher safety standards, and measurable productivity gains—all while reducing energy consumption and emissions.
Regulation, Demand, and the Competitive Edge
The momentum behind green chemistry is not purely idealistic. Two powerful market forces are converging: governments are implementing progressively stricter environmental regulations, and customers—corporate buyers and consumers alike—are actively choosing safer, more sustainable products. Companies that fail to adapt face both regulatory exposure and commercial disadvantage.
Conversely, those that embrace green chemistry early are building genuine competitive moats. They align more naturally with evolving global standards, demonstrate credibility to sustainability-conscious buyers, and reduce long-term risk from raw material volatility and tightening emissions frameworks. Environmental responsibility is no longer a reputational garnish — it has become a core business strategy.
The Regulatory Imperative
India's policy environment is shifting decisively. The Greenhouse Gases Emission Intensity Target Rules, 2025 - a core component of India's Carbon Credit Trading Scheme (CCTS) introduced in 2023 - establish legally binding emission intensity goals for obligated entities in high-emission industries. Chemical companies are now required to account for direct process emissions, combustion emissions, and indirect emissions from purchased energy.
Prime Minister Narendra Modi's commitment at COP26 to reach net zero by 2070, combined with India's Nationally Determined Contributions (NDCs), has elevated climate performance from a voluntary aspiration to a regulatory baseline. The Union Budget for 2025–26 allocated Rs. 1,61,965 crore (US$ 18.7 billion) to the Ministry of Chemicals and Fertilisers, signalling the scale of government commitment.
Consumer Demand as a Growth Driver
Consumer preferences are reinforcing the regulatory push from a different direction. A survey indicates that 60 per cent of Indian consumers now prioritise sustainably made or environmentally friendly products—a trend that is reshaping purchasing decisions across household, personal care, and food categories. Globally, ESG-focused equity funds in India have grown from US$ 330 million in 2019 to US$ 1.3 billion by mid-2023, directing capital toward companies with superior sustainability credentials.
The financial case for ESG performance is increasingly tangible:firms with superior ESG scores gain easier access to financing at lower costs, leading to improved operating margins and shareholder returns. Green bonds and Responsible Care programmes are being widely adopted, aligning corporate investments with global ESG frameworks.
Conversely, companies that fail to adapt face mounting exposure. Global buyers—particularly in Europe and North America—increasingly insist on environmentally responsible sourcing. The EU's Carbon Border Adjustment Mechanism (CBAM) and similar trade-linked sustainability requirements are redefining what it means to be a competitive exporter of chemicals.
India's Opportunity — and Responsibility
India's ambition to become a global leader in chemicals and manufacturing makes this moment particularly consequential. The country has the industrial base, the talent, and the domestic demand to scale its chemical sector significantly. The question is not whether it grows, but how.
Green chemistry offers a clear pathway: industrial expansion that does not trade ecological health for economic output. By prioritising renewable resources, efficient processes, and responsible product design, India can drive growth while protecting the environmental systems that underpin long-term prosperity.
The broader dividend extends beyond any single company or sector. Green chemistry fosters collaboration between industry, research institutions, and government—accelerating the development of solutions that serve society as a whole. It creates new business categories, new export opportunities, and new forms of innovation. As 2025 demonstrated, Indian chemical companies that embraced sustainability-led strategies—through capacity expansions, digitalisation, and specialty chemicals growth—emerged as more resilient and competitive than those that did not.
Spotlight: India Glycols Limited — A Pioneer in Bio-Based Chemistry
Among the companies driving this transition, India Glycols Limited (IGL) stands out as an early and committed pioneer. As a leading manufacturer of bio-based ethylene oxide, glycols, glycol ethers, bio-amines, specialty and performance chemicals, biopolymers, and industrial gases, IGL has built its identity around the principle of “Adopting Green Technology”—not as a marketing position, but as a core operational philosophy embedded across its value chain.
IGL's products are fully biodegradable and sourced from renewable feedstocks, including agricultural residues. Their carbon footprint credentials are validated through life cycle analysis — a rigorous methodology that tracks environmental impact from raw material extraction to end-of-life. In doing so, IGL demonstrates that sustainable chemistry is not a premium niche but a scalable, commercially viable model.
Its trajectory is a signal: organisations that transition from conventional chemistries to safer, more environmentally responsible alternatives — driven by regulatory alignment, consumer awareness, and genuine conviction — are positioning themselves for the next generation of industrial leadership.
The companies that embrace green chemistry today will be the leaders of tomorrow — building a future where industrial progress rests on clean, safe, and responsible chemistry that safeguards both people and the planet.
IGL's trajectory is a signal to the broader industry: organisations that transition from conventional chemistries to safer, more environmentally responsible alternative driven by regulatory alignment, consumer awareness, and genuine conviction are positioning themselves for the next generation of industrial leadership. At IGL, sustainability and profitability are not competing objectives. They are the same objective.
Conclusion: The Leaders of Tomorrow Are Choosing Green Today
The transformation of India's chemical industry is not a future event—it is happening now. The data are unambiguous: a $270-300 billion industry on a trajectory to $400–450 billion by 2030; a regulatory environment that is hardening around emissions, ESG compliance, and responsible sourcing; and a global market in which sustainability credentials are increasingly the price of entry.
Green chemistry is the discipline that makes this transition possible—not by limiting growth, but by redefining what growth means. Prevention over remediation. Renewable over finite. Efficiency over waste. Performance over compromise.
For India, the stakes extend beyond any single sector. How the chemical industry grows will shape the country's ecological health, its energy security, its export competitiveness, and its global standing for decades to come. The choices embedded in today's investment decisions, R&D priorities, and regulatory frameworks will compound—for better or worse—across generations.
India has the industrial scale, the scientific talent, the agricultural feedstock base, and—increasingly—the policy architecture to lead this transition globally. The question for every company in the sector is not whether to engage with green chemistry, but how quickly and how boldly to do so.
(Dr. Sandeep Kumar, Dr. Ajat Shatru, Vikas Sharma, and Dheeraj Tripathi also contributed to the article.)