NITI Aayog Proposes Major Policy Shift To Strengthen India's Chemical Sector

(MENAFN- KNN India) New Delhi, Jul 4 (KNN) NITI Aayog has unveiled a comprehensive strategy to strengthen India's chemical industry through fiscal and non-fiscal interventions, aiming to reduce import dependence and enhance participation in global value chains.

The recommendations were outlined in a report titled 'Chemical Industry: Powering India's Participation in Global Value Chains,' released on Thursday.

The think tank has proposed an operational expenditure support scheme that would incentivise incremental chemical production based on multiple criteria including import bills, export potential, dependence on single-source countries, and end-market relevance.

Under this framework, selected participants would receive financial support for a predetermined duration to boost domestic production capacity.

Infrastructure development forms a key component of the strategy, with NITI Aayog recommending the creation of world-class chemical hubs governed by empowered committees.

The proposal includes enhanced port infrastructure development to facilitate better connectivity and trade flows. Additionally, the report emphasises increased investment in research and development to drive technological advancement and promote self-reliance in the sector.

The recommendations address regulatory challenges by proposing faster environmental clearances to accelerate project implementation.

The report also calls for a structured approach to trade negotiations, specifically incorporating chemical industry requirements into all future free-trade agreements to ensure sector-specific benefits.

Human capital development represents another priority area, with the report highlighting the need for comprehensive skill and talent development programs to meet future workforce requirements.

This initiative aims to address the anticipated demand for skilled professionals as the sector expands.

NITI Aayog projects that implementing these reforms could help India achieve a USD 1 trillion chemical sector by 2040, with the country capturing a 12 percent share of global chemical value chains.

The immediate target involves increasing India's current global value chain participation fr0m 3-3.5 percent to 5-6 percent by 2030.

The comprehensive plan outlines specific quantitative targets including doubling chemical production capacity, eliminating the USD 31 billion trade deficit recorded in 2023 to achieve net zero by 2030, generating USD 35-40 billion in additional exports, and creating approximately 700,000 skilled employment opportunities across the sector.

(KNN Bureau)

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