India's Chemical Sector Can Reach $1 Trillion By 2040, Create 7 Lakh Jobs By 2030: NITI Aayog

(MENAFN- IANS) New Delhi, July 3 (IANS) Targeted reforms will enable India to reach a $1 trillion chemical sector and achieve 12 per cent global value chain (GVC) share by 2040, thus becoming a global chemical powerhouse, a NITI Aayog report said on Thursday.

India's 3.5 per cent share in global chemical value chains and its chemical trade deficit at $31 billion in 2023, underscores its high dependence on imported feedstock and specialty chemicals.

The vision for 2030 is for India to become a global chemical manufacturing powerhouse with a 5 per cent-6 per cent share of the global chemical value chain.

BVR Subrahmanyam, CEO of NITI Aayog, said the chemical sector is far bigger that several traditional industries in the country and this is the time to leverage it.

“We are a major producer of chemicals. This is a fast-growing sector. Chemicals, both organic as well as inorganic, are a part of our lives almost in everything we do,” he told the gathering.

The sector aims to double its current production levels and reduce the trade deficit significantly from $31 billion in 2023 to reach a Net Zero trade balance in chemicals. The initiative will generate an additional export of $35-40 billion generating around 7 lakh skilled jobs, said the report.

However, with targeted reforms encompassing a comprehensive range of fiscal and non-fiscal interventions, India can achieve $1 trillion chemical sector, said the report.

Some of the initiatives that can be taken include establishing world-class chemical hubs in India through revamping existing clusters and developing new ones and creating empowered committee at the Central level, along with creation of a Chemical Fund under the empowered committee with a budgetary outlay for shared infrastructure development, VGF, etc.

The initiatives also include creating an administrative body at the chemical hub level, which will handle the overall management of the hub; developing existing port infrastructure and eight high-potential clusters and introducing an 'Opex subsidy scheme for chemicals.'

The government should also incentivise incremental production of chemical based on import bill, export potential, single source country dependence, end-market criticality, etc. The scheme proposes for incentives on incremental sales to selected participants for a fixed number of years.

Some other initiatives to be taken are to develop and access technologies to enhance self-sufficiency and foster innovation; disbursement of R&D funds to drive innovation with enhanced collaboration between industry and academia through creation of an interface agency in collaboration with DCPC and DST and acquiring access to specific technologies available outside India through fostering MNC partnerships, including securing FTAs to support industry growth.

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