By: ICN Bureau
Last updated : February 01, 2026 7:10 pm
This marks the first time direct budgetary support has been provided for dedicated chemical park infrastructure
The central government has announced a scheme to support states in establishing three dedicated chemical parks, through the challenge route, on a cluster-based plug-and-play model. The objective is to reduce India's chemical import dependency and gradually strengthen domestic manufacturing capabilities.
In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced a major boost for the chemical sector by proposing a new scheme to support states in establishing three dedicated chemical parks.
The projects have been allotted Rs. 600 crore in the Budget Estimates for FY27. This marks the first time direct budgetary support has been provided for dedicated chemical park infrastructure.
The parks will be developed using a challenge-based route on a cluster-driven, plug-and-play model. This is intended to streamline industrial operations and fast-track project execution.
The objectives are:
* Enhance domestic chemical production and reduce import dependence.
* Strengthen India's manufacturing base to meet rising domestic demand.
* Support the goal of making India a global manufacturing hub as part of the "Viksit Bharat" vision.
The budget provisions say Carbon Capture Utilization and Storage (CCUS) technologies to achieve higher readiness level in end use applications across five industrial sectors including Chemicals will be rolled out. Other sectors which are included in this category for the financial assistance are Power, Steel, Cement and Refineries. An outlay of 20,000 crore rupees proposed over the next five years to facilitate CCUS technologies.
As a green initiative the Carbon Capture, Utilization, and Storage programme aims to reduce carbon emission by either storing or reusing it so that captured carbon dioxide does not enter the atmosphere.
In the Union Budget 2026-27 a scheme to revive 200 legacy industrial clusters has been also announced, to improve their cost competitiveness and efficiency through infrastructure and technology upgradation. The announcement is also set to help the Chemicals and Petrochemicals sector.
The Union Finance Minister said reviving and strengthening of traditional industries are important for accelerating and sustaining economic growth and preserving jobs.