NITI Aayog Launches Comprehensive Report to Boost India’s Global Role in Chemical Industry Value Chains.

On July 3, 2025, NITI Aayog launched a strategic report titled “Chemical Industry: Powering India’s Participation in Global Value Chains (GVCs)” in New Delhi. The report aims to position India as a major global player in the chemical sector by 2040.

      - The report was unveiled by BVR Subrahmanyam, CEO of NITI Aayog, in the presence of Suman Bery, Vice Chairman, and top officials from the Department of Chemicals and Petrochemicals, Ministry of Commerce and Industry, and Ministry of Petroleum and Natural Gas. The event brought together stakeholders from academia, industry, and government to discuss structural reforms and trade expansion in the sector.

      - India ranks 6th globally and 3rd in Asia in terms of chemical production, contributing 7% to India’s manufacturing GVA. However, it participates in only 3.5% of global chemical value chains (GVCs) and reported a trade deficit of USD 31 billion in 2023. The report identifies this as a significant opportunity gap for India to bridge.

      - India's domestic chemical market, worth USD 220 billion in 2023, is projected to reach USD 400–450 billion by 2030 and cross USD 1 trillion by 2040, driven by rising demand in sectors like agriculture, textiles, electronics, automotive, and pharmaceuticals. With proper policy interventions, India can increase its GVC share to 12% by 2040.

Main Point :-   (i) The report outlines major challenges such as high import dependency (especially for feedstocks and specialty chemicals), low R&D investment (India invests only 0.7% of chemical GDP vs global average of 2.3%), inadequate infrastructure, high logistics costs, delays in environmental clearances (12–18 months), and a 30% skill gap in advanced chemical technologies.

      (ii) Key recommendations include setting up chemical manufacturing hubs near ports (like Dahej, Paradeep, and Vizag), streamlining environmental clearances, reducing import duties on feedstocks, increasing R&D incentives, establishing industry-academia collaboration platforms, and including chemicals in Free Trade Agreements (FTAs) to boost exports.

(iii) The report proposes production-linked incentives (PLI) for high-value products, developing a national skill framework through ITIs and polytechnics, and attracting FDI to strengthen domestic manufacturing. It targets creating over 7 lakh skilled jobs, doubling India’s chemical exports to USD 75 billion by 2030, and eliminating the trade deficit by 2040.
About NITI Aayog