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CHEMICALSSECTOR OVERVIEW

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The Catalyst of New India’s Growth

SECTORHIGHLIGHTS

14th 8thRanks

in exports and in importsof chemicals (excluding pharmaceuticalproducts) globally

80,000Covers more than

products

9% p.a.

Demand of chemical productsis expected to grow at

over the next 5 years

2.40 lakhDuring June 2014 to September 2018,

people have been trained by CIPET under various skill-imparting activities

USD 100 BnThe petrochemical market in Indiais expected to grow at a CAGR of10 % over the next 5 years to reach

by 2022

3.4%Contributes

to the global chemical industry

2 MnEmploys more than

people

Indian chemical industry is:largest in Asia withrespect to output

largest in the worldwith respect to output

Valued at USD 163 Bn in 2017

3rd

6th

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GROWTHDRIVERS

Per capita consumption of chemicals in India is 1/10th of the world's average. This makes India an attractive destination for investment and growth.

Consumption driven demand:01

By 2030, 23% of the global middle class will most likely be Indian, supporting strong demand for specialty chemicals in the automotive, personal products, water treatment, and constructions segments.

Rising middle class population:02

One of the key economic growth drivers is the government’s investmentboost in infrastructure sector (government provision of USD 92 Bn in FY 2018 Budget as compared to USD 61 Bn in FY 2017).

Improving Infrastructure:03

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GOVERNMENTINITIATIVES

2PCPIRs are specifically delineated investment regions with an area for theestablishment of manufacturing facilities for domestic and export-led productionin petroleum, chemicals & petrochemicals, along with the associated services and infrastructure. Government has approved 4 PCPIRs in the States of Andhra Pradesh (Vishakhapatnam), Gujarat (Dahej), Odisha (Paradeep), andTamil Nadu (Cuddalore and Naghapattinam). Once fully established, PCPIRs areexpected to attract investments worth INR 7.63 lakh Cr (USD 107 Bn) and employment generation (direct and indirect) is expected to be around33.96 lakh persons (3 Mn).

Petroleum, Chemical and PetrochemicalInvestment Regions (PCPIRs):

1100% FDI allowed under the automatic route in chemicals sector except a fewhazardous chemicals.

100%FDI

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Central Institute of Plastics Engineering and Technology (CIPET): 29 CIPETs have been set up across India under the Department of Chemicals.The main objective of setting up the institute is to develop manpower in different disciplines of Plastics Engineering & Technology as no similar institute has been priorly existent in the country.

Chemicals Promotion and Development Scheme (CPDS):Under the CPDS, the Government provides Grant-in-aid for the creation of knowledge products through studies, survey, databank, promotion materials, etc. to facilitate development of the sector.

CoE (Centres of Excellence) in the field of Petrochemicals:Provision of Grant-in-aid to educational/research institutes for setting up CoEs with a view to improve existing petrochemicals technology and to promote development of new applications of polymers and plastics.

4Skill Development

3State-of-the-art infrastructure and enabling common facilities are to assist the sector in moving up the value chain and contributing to the economy more effectively.Four plastic parks have been approved in Madhya Pradesh, Orissa, Assam, and Tamil Nadu.

Setting up of Plastic Parks

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KEY SUB SECTORS

3rd largest India is the

producer of Agro-chemicals

50% of its current production

India exports about

and these exports are likely to remain a key component of the industry

compared with a global average ofThis low consumption is the result of low purchasing power in agricultural areas, unawareness of the existing products, and difficulty of access. With the increase in awareness and purchasing powercapacity, an increase in demand is foreseen

Pesticide consumption in the country is 0.6 kg/hectare,

AGRO CHEMICALS

3-10 kg/hectare.

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3rd largest India is currently the world’s

consumer of polymers and growth in plastic demand is to furtherdrive up consumption

14% The speciality chemicals market has witnessed a growth of

in the last five years; the market size is expected to reach

USD 70 Bn by 2020

Growth drivers include a growing construction industry and adoption ofadvanced coating, ceiling and polymer-based reinforcing material inconstruction as well as in plastics, and paints and coatings for theautomotive sector

SPECIALITY CHEMICALS

industry in India

Low per capita paper consumption in India, compared to the global average, suggests there is good opportunity for thepaper chemicals

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INDUSTRY CLUSTERS/ZONESPCPIRs AND REFINERIES

Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR)

Reliance Industries Limited - Jamnagar, Gujarat

Indian Oil - Paradip, Odisha | Panipat, Haryana | Koyali, Gujarat | Mathura, Uttar Pradesh | Haldia, West BengalBarauni, Bihar | Bongaigaon, Assam | Guwahati, Assam | Digboi, Assam

HMEL - Bhatinda, Punjab NRL - Numaligarh, Assam Bharat Oman Refineries Ltd - Bina, Madhya Pradesh ONGC - Tatipaka, Andhra PradeshCPCL - Manali, Tamilnadu | Cauvery Basin, Tamilnadu Bharat Petroleum - Kochi, Kerala | Mumbai, Maharastra MRPL - Mangalore, KarnatakaEssar - Vadinar, Gujarat

Hindustan Petroleum- Visakhapatnam, Andhra Pradesh | Mumbai, Maharashtra

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UPCOMINGPROJECTS

Project AnnouncementYear

InvestorCompany

Investment Value (USD Mn)

Petrochemical

Petrochemicals

Petrochemical

Petrochemical

Petrochemicals

Petrochemicals

Petrochemical

44,000

9,500

5,700

4,300

4,000

3,000

1,030

155

153

62

61

Mega Refinery

Refinery

Saudi Aramco, Indian PSUs

Refinery

Petrochemical ComplexHPCL + GAIL

Refinery

Ethylene Glycol & Polypropylene

Petrochemical Complex

Reliance

Sabic

BPCL

HMEL

Solvay

SanmarPetrochemicals

IOCL

Expansion

Expansion of Polymer Plant

Expansion Carbon Black

Himadri Specialty Chemicals

SudarshanChemicals

Specialty Chemicals

Specialty Chemicals

Specialty Chemicals

H2O2, PVC

Petrochemicals(50% stake in OPAL)

2018

2017

2017

2018

2018

2017

2018

2017

2018

2018

2017

Sector

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KEY STAKEHOLDERS

Chemicals Export PromotionCouncil (Chemexcil)

Indian Specialty ChemicalManufacturers' Association

Department of Chemicals and Petrochemicals, Ministryof Chemicals and Fertilizers

Indian ChemicalCouncil (ICC)

Indian PaintAssociation (IPA)

Crop Care Federation

Indian Paint Assocition

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KEY PLAYERSIN INDIA

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