Index : 2,417 | 1Yr : -0.94% | 1Mo : +4.15%
Category : Sectoral Trackers
Min Investment : 11,408
Chemicals are consumed by almost every industry. India is a net importer of chemicals. The industry is divided into several sub-sectors such as commodity chemicals (40%), agrochemicals (20%), specialty chemicals (20%) and others like pharmaceuticals and biotech. It contributes around 3% in the GDP of the country.
Since India is also a net importer of crude oil (basic component in chemicals), it makes it challenging to have an edge in comparison to other countries in commodity chemicals. Unlike most industries the major costs in the chemical industry is not raw material but product development & marketing. Quality research & development (R&D) is a focal point and is very important for these companies no matter how small. There is a large scope for Indian companies to collaborate with foreign counterparts to grow their business in specialty chemicals. The government of India has allowed 100% FDI for this sector and foreign companies have been increasing their investments in the recent years. The Draft National Chemical Policy aims to increase the chemical sector's share as a percentage of GDP.
India's rising population, agricultural demand, urbanisation and consumerism are in its favour. With the required intellectual capital, this sector can grow at a healthy rate in the future.