NITI Aayog Proposes Incentives For Chemical Industry

(MENAFN- Live Mint) New Delhi: A mix of fiscal and non-fiscal incentives can propel India's chemicals industry into the global big league, policy think-tank NITI Aayog said on Thursday, a sector that can catalyze India's journey to a $5-trillion economy and beyond.

The strategic roadmap unveiled in a new report aims to raise India's share of the global chemicals value chain from the current 3-3.5% to as much as 6% by 2030 and 10-12% by 2040.

Achieving this will demand coordinated national efforts spanning policy reforms, infrastructure upgrades, technological advancement and closer international partnerships, said the report titled 'chemical industry: powering India's participation in global value chains.'

The report recommended offering operational expenditure subsidy chemicals.“Incentivize 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,” the report said.

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The roadmap sets out growth areas including expansion of exports in high-potential segments such as agrochemicals and pigments, and investment in sunrise sectors like battery and electronic chemicals to position India at the forefront of emerging technologies.

Other priorities include boosting domestic production competitiveness in products such as PVC and improving technology access for import-dependent chemicals like acetic acid and plastic additives, thereby reducing India's reliance on overseas suppliers.

Supporting these growth themes are seven policy pillars ranging from the development of chemical hubs and port infrastructure, to operational expenditure support, research and development funding, talent development, and regulatory simplification. The policy proposals emerged from consultations with over 30 senior industry executives and officials from key ministries.

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“By embracing these recommendations with urgency and commitment, India can achieve its 2030 aspiration of a larger global value chain share, transition to a net-zero chemical trade position, and set the stage for becoming a $1 trillion chemicals industry by 2040. The future of India's chemical sector is not just a vision- it is a well-charted roadmap awaiting timely execution,” said the report.

Drawing lessons from China's rapid industrial ascent, the report highlights the urgency of building local manufacturing scale and vertical integration. The realignment of global trade presents India with a once-in-a-generation chance to establish itself as a key node in the global chemicals network, the report said.

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