India’s chemicals and petrochemicals industry, currently valued at approximately $220 billion, is projected to grow to $300 billion by 2030 and potentially reach $1 trillion by 2040. Government initiatives, rising production, foreign investment and dedicated chemical parks are expected to strengthen India’s position in the global chemicals manufacturing industry.
India is currently the sixth-largest chemicals producer globally and the fourth-largest in Asia, according to a government factsheet released on Saturday. The sector supplies essential raw materials and products to several industries, including pharmaceuticals, textiles, construction, automobiles, electronics and consumer goods. India is also the world’s second-largest manufacturer and exporter of dyes and the third-largest exporter of agrochemicals.
The industry comprises approximately 13,000 large-scale units and 4.45 lakh micro, small and medium enterprises (MSMEs), highlighting its significant contribution to industrial activity and employment. Production of major chemicals and petrochemicals increased from 45,638 thousand metric tonnes in 2015–16 to 58,617 thousand metric tonnes in 2024–25.
Foreign Investment Strengthens India’s Chemicals Industry
Foreign investment has further strengthened the industry’s growth prospects. India permits 100 per cent Foreign Direct Investment (FDI) through the automatic route in most chemical sectors. FDI inflows reached Rs 1,04,895 crore during 2014–2026, compared with Rs 45,240 crore during 2004–2014, representing more than a twofold increase.
Government initiatives are focusing on expanding industrial capacity, improving infrastructure, promoting research and developing specialised manufacturing hubs to attract further investment.
BHAVYA Rasayan Scheme to Develop Three Chemical Parks
A major initiative is the Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) Scheme, approved in July 2026, which aims to establish three dedicated chemical parks. Each park will cover at least 2,000 acres, with the Centre providing grants of up to Rs 1,000 crore per park, subject to a minimum State Government contribution of Rs 500 crore.
The scheme has a total financial outlay of Rs 3,030 crore and will operate from FY 2026–27 to FY 2030–31. Additionally, the Research, Development and Innovation (RDI) Scheme, launched in November 2025 with a corpus of Rs 1 lakh crore, aims to encourage private-sector investment in advanced technologies, industrial research and innovation through long-term financing and refinancing support.
With rising production, increasing foreign investment, dedicated chemical parks and research funding, India’s chemicals and petrochemicals industry is positioning itself for substantial expansion. These measures are expected to support the country’s ambition to become a major global manufacturing and export hub.
