India is positioning its chemicals and petrochemicals industry as a major engine of manufacturing growth, with an ambitious target of expanding the sector into a US$ 1 trillion industry by 2040.

Already valued at around US$ 220 billion, the industry is projected to reach US$ 300 billion by 2030 before scaling up to US$ 1 trillion by 2040. Its strategic importance extends across pharmaceuticals, agriculture, textiles, construction, automobiles, electronics and consumer goods, making it a critical link in India's industrial and economic development.

India is currently the world's sixth-largest producer of chemicals and the fourth-largest in Asia. It is also the second-largest manufacturer and exporter of dyes and the world's third-largest exporter of agrochemicals.

The sector's manufacturing base is extensive, comprising approximately 13,000 large-scale units and 4.45 lakh micro, small and medium enterprises (MSMEs). With dedicated industrial infrastructure, investment incentives and research initiatives gaining momentum, the government is seeking to strengthen domestic production and expand India's footprint in global value chains.

Manufacturing push gains momentum

A major thrust of the government's strategy is to expand domestic manufacturing capacity through investment, infrastructure development and a supportive policy framework.

India allows 100% foreign direct investment (FDI) through the automatic route in most chemical sectors, enabling overseas investors to invest without prior government approval.

The policy push has translated into a sharp rise in investment. FDI inflows into the sector reached Rs. 1,04,895 crore during 2014–2026, more than double the Rs. 45,240 crore recorded between 2004 and 2014.

Manufacturing output has also registered significant growth. Production of major chemicals and petrochemicals rose from 45,638 thousand metric tonnes (MT) in 2015–16 to 58,617 thousand MT in 2024–25.

The government is now looking to build on this momentum by expanding industrial capacity, developing specialised manufacturing hubs and strengthening infrastructure across the sector.

Three PCPIRs attract Rs 3.4 lakh crore investment, generate 3.7 lakh jobs

Integrated industrial infrastructure is emerging as a key driver of India's chemicals and petrochemicals ambitions.

The Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) have been designed to bring manufacturing units, common infrastructure and support services together in dedicated industrial clusters.

Each PCPIR covers approximately 250 sq. km, with around 40% of its area earmarked for processing activities. The model provides industries with access to roads, rail networks, ports, water supply, steam generation facilities, Common Effluent Treatment Plants and sewage disposal infrastructure.

India currently has three operational PCPIRs — Dahej in Gujarat, Visakhapatnam–Kakinada in Andhra Pradesh and Paradeep in Odisha.

Together, the three regions have attracted investments worth Rs 3.4 lakh crore, generated 3.7 lakh jobs and facilitated the establishment of more than 2,200 chemical manufacturing units.

The cluster-based approach is intended to reduce infrastructure constraints, improve operational efficiency and create a more attractive environment for large-scale industrial investment.

BHAVYA Rasayan to establish 3 dedicated chemical parks

In another major push to strengthen the manufacturing ecosystem, the government approved the Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) Scheme in July 2026 to establish three dedicated chemical parks.

The scheme carries a total financial outlay of Rs 3,030 crore, including Rs 3,000 crore for common infrastructure and basic utilities and Rs 30 crore for administrative expenditure.

Each proposed park will cover at least 8 square kilometres, equivalent to 2,000 acres. The Centre will provide grants of up to Rs 1,000 crore per park, subject to a minimum contribution of Rs 500 crore from the respective State Government.

The scheme will be implemented over five years, from FY 2026–27 to FY 2030–31.

The parks are expected to offer plug-and-play infrastructure, enabling companies to establish manufacturing operations without having to independently develop essential facilities. Centralised Common Effluent Treatment Plants, storage and disposal facilities and hazardous waste management systems will form part of the infrastructure.

Beyond attracting fresh investment, the initiative is expected to improve resource utilisation, lower logistics costs, expand domestic production and promote environmentally responsible industrial development.

Plastic parks target downstream growth

Strengthening the downstream processing industry is another important component of India's chemicals and petrochemicals strategy.

The Scheme for Setting up of Plastic Parks aims to increase domestic polymer absorption, encourage value addition and consolidate India's plastic processing capabilities.

These dedicated industrial zones bring plastic-related businesses and manufacturing activities together, creating opportunities for investment, production, exports and employment.

Under the scheme, the government provides grants covering up to 50% of the project cost, subject to a ceiling of Rs 40 crore per project. The remaining funding is contributed by State Governments or their agencies, beneficiary industries and other stakeholders.

The parks also incorporate waste management and recycling initiatives to encourage environmentally sustainable growth.

Ten Plastic Parks have been approved across the country. Four have achieved 100% infrastructure completion, including three during 2025–26.

The initiative is expected to strengthen downstream manufacturing, improve polymer utilisation and support the development of a more integrated domestic plastics industry.

Research & innovation take centre stage

As chemical applications become increasingly sophisticated, the industry's growth will depend not just on manufacturing capacity but also on research, technological advancement and specialised expertise.

The government has initiated several programmes to strengthen knowledge creation, encourage innovation and connect research institutions with industrial requirements.

Chemical promotion scheme backs research and farmer awareness

The Chemical Promotion and Development Scheme (CPDS) supports the growth of the chemicals and petrochemicals industry through research, knowledge dissemination and sector-specific studies.

The scheme funds studies, surveys, databases and promotional activities while providing Grants-in-Aid (General) to organisations, industry associations and other entities for workshops, seminars, research and related initiatives.

An important component of the programme is farmer awareness and training on the safe and responsible use of pesticides.

Public sector undertaking HIL (India) Limited has been conducting farmer training programmes under CPDS since 2016. The Institute of Pesticide Formulation Technology (IPFT) joined the initiative in 2022–23.

The programmes promote the safe and judicious use of pesticides and encourage Integrated Pest Management practices aimed at minimising pesticide residues in food grains, edible oils, fruits and vegetables.

As of August 2026, more than 250 programmes had benefited over 1 lakh farmers across the country.

Rs. 1 lakh crore RDI scheme opens new opportunities for advanced chemicals

The government's Research, Development and Innovation (RDI) Scheme, launched in November 2025, is expected to provide a significant boost to private-sector research and technological development.

With a corpus of Rs 1 lakh crore, the scheme aims to catalyse private investment in research and innovation by providing long-term financing and refinancing on favourable terms for transformative projects.

Its broader objective is to accelerate the adoption of advanced technologies, strengthen industrial competitiveness and promote self-reliance in critical and emerging technology areas.

In a significant development for the chemicals industry, Advanced Chemicals, Petrochemicals and Material Technologies were added as eligible technology areas under the scheme with effect from October 8, 2026.

The inclusion is expected to encourage indigenous technology development, support advanced industrial applications and strengthen India's research capabilities in strategically important chemical and material technologies.

CIPET trains 6.72 lakh professionals 

Building a skilled workforce is critical to sustaining the expansion of the chemicals and petrochemicals industry.

The Central Institute of Petrochemicals Engineering & Technology (CIPET), a centrally funded technical higher education institution, plays a key role in this effort through its Skill Development, Technology Support, Academic and Research (STAR) activities.

Its infrastructure includes Centres for Skilling and Technical Support (CSTS), Plastic Waste Management Centres (PWMC), Schools of Advance Research in Petrochemicals (SARP), Advance Research Schools for Technology and Product Simulation (ARSTPS) and Advance Polymer Design and Development Research Laboratories (APDDRL).

CIPET's nationwide network now comprises 51 centres, including 19 established since 2014. Three centres are specifically dedicated to plastic waste management.

The institution has trained nearly 6.72 lakh skilled professionals, including more than 5.21 lakh during 2014–24. It also completed 8.53 lakh Technology Support Service assignments during the same period.

The scale of its operations highlights the growing importance of technical education, specialised skills and industry-oriented research in supporting India's petrochemicals and allied manufacturing sectors.

Centres of Excellence drive indigenous tech development

Research institutions are also contributing to the development of new technologies and strengthening India's domestic innovation capabilities.

A network of 18 Centres of Excellence has been established to advance existing technologies, promote research and develop new industrial applications.

Together, these centres have filed 85 patents, published more than 600 research papers and developed 105 new technologies and products.

The achievements underline the role of specialised research institutions in developing indigenous capabilities, supporting industrial innovation and reducing dependence on external technologies.

As domestic manufacturing expands, ensuring product quality and compliance with established standards has become increasingly important.

The government has issued Quality Control Orders (QCOs) to protect consumers, promote quality manufacturing and prevent the entry of substandard imports.

As of August 2026, 37 QCOs were in force, making specified chemical and petrochemical standards mandatory.

Under these orders, domestic manufacturers and importers must comply with the quality parameters prescribed by the Bureau of Indian Standards (BIS).

The measures are aimed at creating a level playing field for manufacturers, strengthening consumer protection and improving the overall quality of products entering the domestic market.

Nationwide safety drive targets 2,393 hazardous industrial units

Workplace safety and responsible chemical management are also receiving greater attention as industrial operations become more extensive and complex.

Under the Viksit Bharat@2047 Action Plan, a nationwide training programme has been launched for workers employed in Major Accident Hazard (MAH) units.

The programme focuses on the “Safe Handling of Hazardous Chemicals at the Workplace and Reducing Risk Associated with Hazardous Chemicals”.

It aims to cover all 2,393 MAH units across the country over five years.

Each training programme accommodates 100 participants drawn from 50 MAH units, with two employees representing each unit.

As of August 2026, 21 training programmes had been conducted nationwide, covering 1,376 industrial units and training 2,441 personnel.

The initiative seeks to improve industrial preparedness, strengthen awareness of chemical hazards and promote safer handling practices at workplaces.

India Chem 2026 puts industry's global ambitions in focus

India's chemicals and petrochemicals industry is undergoing a broad-based transformation, with manufacturing expansion, industrial infrastructure, research, innovation and quality compliance emerging as key priorities.

Dedicated investment regions and chemical parks are expected to attract fresh capital and strengthen manufacturing clusters. Meanwhile, research funding, technical institutions and Centres of Excellence are building the technological and human-resource capabilities needed to support the next phase of industrial growth.

Quality Control Orders and workplace safety programmes are adding another dimension to this expansion by reinforcing product standards and responsible industrial practices.

Against this backdrop, India Chem 2026 provided an important platform to connect domestic industry developments with international participation, business engagement and opportunities for global collaboration.

The larger ambition is clear: to move beyond being a major producer and emerge as a globally competitive hub for chemicals, petrochemicals and advanced materials.

With a rapidly expanding industrial base, rising investment and a growing focus on indigenous technology, India is laying the groundwork for a chemicals and petrochemicals industry capable of supporting its long-term manufacturing ambitions and strengthening its position in global value chains.