Lok Sabha Question No. 1246 (UNSTARRED), answered on 2026-02-06
Subject: Growth in Demand and Production Capacity of Chemicals
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Shri Balwant Baswant Wankhade

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS & FERTILIZERS DEPARTMENT OF CHEMICALS & PETROCHEMICALS

## LOK SABHA

## UNSTARRED QUESTION NO.  1246

ANSWERED ON 06/02/2026

## GROWTH IN DEMAND AND PRODUCTION CAPACITY OF CHEMICALS

## 1246.  SHRI BALWANT BASWANT WANKHADE:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) the actual market size of the Indian chemicals and petrochemicals sector at the end of 2025;
- (b) whether the projected target of USD 300 billion by 2025 has been achieved, if so, the details thereof;
- (c) the extent of growth in demand and production capacity recorded during the period leading up to 2025, vis-a-vis earlier projections;
- (d) whether the said  target  has  been  achieved,  if  so,  the  details  thereof  and  if  not,  the reasons therefor, including constraints related to investments, infrastructure, policy implementation or  global market conditions; and
- (e) the roadmap and policy measures being pursued to achieve the long-term target of USD 1 trillion by the year 2040?

## ANSWER

## MINISTER FOR CHEMICALS & FERTILIZERS

(SHRI JAGAT PRAKASH NADDA)

- (a) to (e): The  output  for  Chemicals  and  Petrochemicals as per the Annual Survey of Industries (ASI) done by the Ministry of Statistics & Programme Implementation for last fiveyears is given in the table below.  It may please be noted that the Survey of Industries (ASI) for Financial Year 2024-25 has not been published yet.

| The output for Chemicals &Petrochemicals in Rs. Crore   | The output for Chemicals &Petrochemicals in Rs. Crore   | The output for Chemicals &Petrochemicals in Rs. Crore   | The output for Chemicals &Petrochemicals in Rs. Crore   | The output for Chemicals &Petrochemicals in Rs. Crore   |
|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|---------------------------------------------------------|
| Year 2019-20                                            | 2020-21                                                 | 2021-22                                                 | 2022-23                                                 | 2023-24                                                 |
| Total Output 11,99,309                                  | 11,91,354                                               | 16,03,219                                               | 19,32,057                                               | 18,71,943                                               |

The chemical sector is largely delicensed except for a group of three hazardous chemicals. The sector  offers  substantial  opportunities  for  growth,  diversification  as  it  also  feeds  several downstream  industries  such  as  Agriculture,  Fertilizers,  Pharmaceuticals,  Nutraceuticals, Electronics,  Semiconductors,  Textiles,  Automobiles,  Consumer  goods,  Construction  sector, etc.

As per the Foreign Direct Investment Policy, 100% FDI under the automatic route is allowed in the chemicals and petrochemicals sector (excluding fertilizers) for both manufacturing and trading activities, thereby facilitating investments in the sector.  From April 2000 to September 2025,  cumulative  FDI  equity  inflows  for  the  Chemicals  sector  is  INR  1,47,453.93  crore, accounting for 3.11% of total FDI equity inflows into the country. The details of last five years are as under:

| Financial Year (April-March)   | FDI Equity Inflow from CHEMICALS (OTHER THAN FERTILIZERS) Sector   | FDI Equity Inflow from CHEMICALS (OTHER THAN FERTILIZERS) Sector   |
|--------------------------------|--------------------------------------------------------------------|--------------------------------------------------------------------|
|                                | (In INR Crore)                                                     | (In USD Million)                                                   |
| (1)                            | (2)                                                                | (3)                                                                |
| 2020-21                        | 6,300.21                                                           | 847.07                                                             |
| 2021-22                        | 7,202.22                                                           | 965.78                                                             |
| 2022-23                        | 14,662.04                                                          | 1,850.01                                                           |
| 2023-24                        | 6,985.32                                                           | 843.97                                                             |
| 2024-25                        | 8,943.45                                                           | 1,060.56                                                           |
| 2025-26 (Up to September 2025) | 4,598.19                                                           | 534.12                                                             |

Further, Department of Chemicals and Petrochemicals has been taking various measures to support the sector. The measures are as follows:

Petroleum,  Chemicals  and  Petrochemicals  Investment  Regions  (PCPIR): To  attract investments in chemicals & petrochemicals sector, Department had notified the Petroleum, Chemicals and Petrochemical Investment Region (PCPIR) Policy. PCPIRs are conceptualized as  cluster-based  model  of  Development  with  common  infrastructure  and  support  services. Three  PCPIRs  have  been  set  up  at  Dahej  (Gujarat),  Vishakhapatnam-Kakinada  (Andhra Pradesh)  and  Paradeep  (Odisha).  Currently,  2,246  chemical  units  are  functional  in  these

PCPIRs having a cumulative investment of Rs. 3,49,192 crore and these regions have generated employment of 3.7 lakh persons.

Plastic Parks: The Department implements the Scheme for Setting up of Plastic Parks under the scheme of New Scheme of Petrochemicals. The Scheme promotes setting up of need-based Plastic Parks with requisite state-of-the-art infrastructure and enabling common facilities. The objective  is  to  consolidate  and  synergize  the  capacities  of  downstream  plastic  processing industry to help increase investment, production and export in the sector as well as generate employment. Under the Scheme, the Government of India provides grant funding up to 50% of the project cost to the State government subject to a ceiling of Rs. 40 crore per project. In accordance with the Scheme Guidelines, 9 Plastic Parks have been approved so far and the same are at different levels of implementation.

Free Trade Agreements: Further, various Comprehensive Economic Partnership Agreements (CEPAs) and other Free trade agreements with different countries and regional groupings have been negotiated by the Government in the recent years to promote greater integration of the sector with the global value chains. These countries / regional blocks include Oman, the United Kingdom, the United Arab Emirates, European Free Trade Association and Australia.

In  addition  to  these  infrastructure-led  initiatives,  the  Department  has  also  undertaken  the following initiatives aimed at research and development, technology upgradation, and human resource development, to promote the sector.

Centre of Excellence: The Department of Chemicals and Petrochemicals has formulated a scheme on setting up of Centres of Excellence. The objective is to provide grant-in-aid to educational and research institutions to improve existing technology and promote development of new applications of polymers and plastics. The emphasis of the Scheme is on modernization and  upgradation  of  existing  manufacturing  processes  as  well  as  improving  the  quality  of products. Under the scheme, the Government of India provides financial support up to 50 per cent of the total project cost subject to an upper limit of Rs. 5 crores. So far, 18 CoEs have been approved under the Scheme. Earlier, the CoE scheme was only available for petrochemical sector. Now, the revised scheme includes chemicals sector also.

Skilling and Human Resource Development through CIPET: The Central Institute of Petrochemicals Engineering & Technology (CIPET) is a technical education institution under the  Department of Chemicals & Petrochemicals, engaged in skill development, technology support, as well as academic and research activities for the promotion of the petrochemical and allied industry in the country. CIPET has 48 centers across the country. During 2024-25, CIPET provided training to 75,763 persons and during 2025-26 (till 15.01.2026), 46,381 persons have been imparted skill training.

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