Role Of Chemical Industry In The Growth Of India’s GDP
14 Apr 2016 in Industry
The potential and performance of India’s chemical industry has sealed its position as a major contributor to the country’s GDP.
- In 2014 alone the sector generated business worth 118 billion US dollars.
- It has been estimated that the sector witnessed growth of almost 14% in the last years.
- 2.11% of India’s GDP is contributed by the chemical industry.
- Between 2000 and 2015, the Indian chemical industry witnessed foreign direct investment worth 10.49 billion US dollars.
These numbers indicate the pace at which the sector is growing owing to increased consumption. The major players in the chemical sector include bulk chemicals, agrochemicals and specialty chemicals.
The government of India has already recognized the potential that this industrial sector offers. The most important reminder of this aspect is the fact that the government of India allows 100% FDI in the chemicals industry sector. Moreover, the 12th five-year plan does put a lot of emphasis on making business an easier process for Indian chemicals suppliers. Following is an excerpt from the Planning Commission summary regarding the role of the chemical industry in India’s GDP: “With Asia’s growing contribution to the global chemical industry, India emerges as one of the focus destinations for chemical companies worldwide. With the current size of approximately $108 billion, the Indian chemical industry accounts for ~3% of the global chemical industry.”
The government of India has also recognized the need for better infrastructure for the chemicals industry along with sustained support in terms of funding newer cutting-edge technology that will ultimate boost the industry and thereby boost the country’s GDP in the long run.
Following are some aspects of the chemical industry which hint at its diverse role in India’s growth story:
There is Great Potential for Sustained Growth
Owing to the increase in the spending power of the individual consumer, the opportunities of growth for the chemical industry is also on the rise. To meet the consumption demand, other sectors such as paints, textiles, adhesives and construction have increased their demand for chemicals. This chain reaction had aided chemicals suppliers and is helping them in increasing their business and thereby adding to the country’s GDP. Moreover, the Indian chemicals industry already has a strong presence in the exports segment as well with it accounting for nearly 6% of India’s total exports.
Quality Assured by the Chemicals Industry
It has been safely established that the chemicals industry maintains strict levels of quality across all its manufacturing bases. World-class product manufacturing is no longer a pipe dream with the best of scientific manpower, chemical sourcing and continuous support from the government.
Although the chemicals industry is growing at a fast pace, there are still challenges that it needs to overcome with the support of both the public and private sectors in order to become a major contributor towards India’s GDP.