Chemical industry is one of the oldest industries in India. It not only plays a crucial role in meeting the daily needs of the common man, but also contributes significantly towards industrial and economic growth of the nation In the year 2003, the industry contributed around 6.7 percent to the GDP. The industry had been projected to be worth USD 100 billion by 2010, with its contribution to the GDP around 12.1 percent and its share of the global industry to grow from1.9 percent to 3.9 percent. In 2007, the industry was worth USD 30 billion.
Characteristics of the Indian Chemical Industry
The Indian chemical industry is characterized by (1) high domestic demand potential (2) high degree of fragmentation and small scale of operation (3) limited emphasis on exports due to domestic market focus (4) low cost competitiveness as compared to other countries due to higher cost of power and other utility, import duties, taxes, higher cost of capital and raw material and poor infrastructure facility (5) low focus on R&D despite innovative processes to synthesize product cost effectively.