Nowadays, manufacturing industries are developing at a steady rate. We could understand how we are inextricably linked to the Indian chemical Industry. Whether it is the drug, cleaning agents, synthetic garments, or thermoplastic furniture, everything around us is a direct or indirect product of the chemical industry. This industry manufactures more than 70,000 commercial chemical products yearly, which has assisted it to gain the sixth spot in the list of the largest chemical producers in the world and the third spot in the list of Asia. Although there are many opportunities for the chemical industry in India that are supporting to develop and progress internationally, at the same time there are many difficulties in its path hindering its growth. Let’s know about the opportunities and challenges that the Indian chemical industry is confronting today.
Challenges faced by the Indian Chemical manufacturing Industry:
- Shortage of raw materials
The raw materials or feedstock used in the organic, as well as the inorganic chemical industry, are not quickly accessible in the market. The chief feedstock like naphtha and natural gas are accessible at a very eminent cost in India as contrasted to other nations like the Middle East, China, and other South East Asian countries. This shortage of feedstock makes India uncompetitive in the worldwide chemical market.
- Comfort in Affordable Import
One of the prominent challenges confronted by the Indian chemical industry is the expertise in the availability of inexpensive chemicals through import. The tax and other entry barriers on the import of several chemicals have been waived off by the Indian government. This has directed to an improvement in the import of various chemicals accessible in the global market at a much lower price.
- Remote Location and Poor Infrastructural Facilities
The significant Indian chemical industry has been established along the west coast in Gujarat, while the biggest need for chemicals is in southern and eastern India. This provides a rise in logistical transportation prices, thus enhancing the overall price of chemicals. In addition to that, there are various infrastructural difficulties encountered by the enterprise. The ports do not have sufficient facilities, the pipeline connectivity is considerably poor, the power supply is inadequate and even the railway stations are a disorder; considering it is challenging for the chemical industries to obtain the raw material from many chemical product vendors in India
- Complicated Regulatory problems and high tax rates
The massive duty tax inflicted on a lot of raw materials exceeds the tax imposed on the ready-made products.
This disappoints the Chemical Industry of India from the manufacturing sector, more chemicals due to the high cost of raw materials and supports the import of similar chemicals due to the negligible taxes
Indian Chemical Industry – Opportunities
- Enhanced need for value-added products
The neediest for value-added chemical products such as performance plastics and biodegradable polymers are anticipated to maximize on the upcoming time due to the different environmental factors. This would be a new opportunity for the chemical industries in India to begin involving the growing necessities of value-added chemical products. With some more trial in value-added products, R&D can turn to be immense chemical business opportunities for Indian Enterprises
- Increase Export in Developing Markets
Another prominent opportunity for the chemical industry in India is provided by the energetically rising countries of the middle east, Africa and the Asia Pacific. These nations are growing at a faster pace as contrasted to the grown nations of Europe and North America thus providing more opportunities for export to the big as well as small chemical industries in India. Currently, the chemical export share of our country in the international market has been just 2%; the day by day growth in these rising markets would open modern export opportunities for India
- Coal Gasification
India is presented with coal in excess. Coal gasification comes as an excellent opportunity for the Indian chemical industry to expand its petrochemical and chemical production by leveraging in gasification technology. The need for petrochemicals has developed and the performance of coal gasification for generating more and more chemicals and petrochemicals would be a big opportunity to satisfy this expanding need which was earlier being satisfied by expanded imports.
- Reverse Special Economic zone in International Market
Setting up chemical plants in contrary SEZs aka Special Economic Zones in nations like Iran, Myanmar, and Mozambique would provide new opportunities to India that has always been seeming for cheaper raw materials for its chemical industry. Chemical plants emerge in these economic zones would enable cheap and easy duty-free import of raw materials for additional utilization.
The Indian chemical industry has gained much-needed assistance in the earlier 4-5 years. The Government is necessitating strict measures to cut out the challenges encountered by the industry and coming up with new schemes and plans to leverage all the possibilities to the summit. In fact, the new ‘Make In India’ initiative would also perform a central position in advancing the extension of the Indian chemical industry.