Over the past decade, production in the chemicals and petrochemicals sector has shown a steady upward trend. Total output increased from 45,638 thousand metric tonnes (MT) in FY16 to 58,617 thousand MT in FY25, representing a Compound Annual Growth Rate (CAGR) of 2.8 per cent. This growth reflects increasing demand from both domestic and export markets.
Strategic Role in India’s Industrial Ecosystem
The sector not only supports downstream industries such as pharmaceuticals, plastics, and fertilizers but also drives employment and technological advancement. Its integration with the petroleum and natural gas sectors ensures a continuous supply chain, enabling India to maintain competitive advantages in global chemical markets.
As noted in the Economic Survey, the Department of Chemicals and Petrochemicals monitors major chemicals and petrochemical products through Monthly Production Reports (MPRs) received from large and medium-scale units. This data helps policymakers assess sectoral trends, capacity utilization, and identify areas for investment and reform.
Policy Support and Future Outlook
Government initiatives aimed at expanding the chemicals and petrochemicals sector, including production-linked incentives, research and development support, and infrastructure improvements, are expected to further enhance sector growth. Analysts note that continued investment in sustainable and high-value chemical production could significantly increase India’s share in global markets.
Industry experts highlight that fostering innovation, enhancing domestic manufacturing capabilities, and improving supply chain integration will be critical to sustaining long-term growth. With these measures, India aims to strengthen its position as a global hub for chemicals and petrochemicals.