Gptie Ppt- Chemical Sector

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Overview Chemical Industry is an important constituent of the Indian economy having approx. US $ 28 billion turnover which is approx. 7% of India’s GDP. In terms of volume, it is 12th largest in the world, and 3rd largest in Asia. Within India, it constitutes about 15% of manufacturing capacity and 20% of the Excise revenue to the Government of India. Chemical industry has weightage of about 13% in the index of industrial production. The global chemical industry is valued at about US $ 1.7 trillion. Of which, India’s chemical sector accounts for just 2% Source: Dept. of chemical and petrochemical

Overview contd… India’s present share in Global Trade is 0.6% i.e. USD 45 Billion & it has been expected to increase the same to 1% i.e. USD 80 Billion by 2011.

Chemical & Pharmaceutical Industry is the most important Foreign Exchange earner with major value additions through out the value chain. The value is added using Knowledge, energy and Capital.

The Indian Chemical sector accounts for 13-14% of total exports and 8-9% of total imports of the country. 3

Source: Dept. of chemical and petrochemica

Major Chemicals

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Production Centers United Phosphorous Ltd, Mumbai P.I Industries, Jaipur Excel India, Mumbai Colour Chem. Ltd., Mumbai Sudarshan Chemical Industries, Pune Colourtex, Ahmedabad Jubilant Organosys Ltd., New Delhi Herdilia-Schentady Ltd. Mumbai National Organics Chemicals Ltd., Mumbai Gujarat Heavy Chemicals Ltd., Ahmedabad. India Glycols Ltd., New Delhi Gujarat Alkalies and Chemicals Ltd., Baroda ICI Calcutta 5

STATE WISE SHARE IN PRODUCTION OF SELECTED MAJOR CHEMICALS (2006-07)

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Source: Ministry of Commerce

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Import of Selected Chemicals (

Source -

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Export of Selected Chemicals (

Source -

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Domestic Industry Indian Chemical Industry • • •

12th largest in the world and 3rd largest in Asia a strong player in the generic pharmaceutical market. 2nd largest producer of agrochemicals in Asia.

•Indian pharmaceutical industry ranks 4th in volume & 13th in terms of value in the world. •Indian Chemical Industry (including pharmaceutical) = $40 bn in 2006 •Market is expected to grow to $75.8 bn - 13.6% CAGR by 20119 Source: Datamonitor, Chemicals in India, October 2007

Domestic Industry Industry divided into 3 segments: 3. Basic chemicals 4. Specialty chemicals and 5. Knowledge chemicals.

Source: KPMG Report

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Industry classification (

Source: KPMG Report

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Trends in Exports (

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Data Source: DGCIS, Kolkata

Major export destinations •

UAE

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United States

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United kingdom

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China

Source:

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Major Exporters •Indian Petrochemical Corporation Limited (IPCL) •Gas Authority of India Limited (GAIL) •Haldia Petrochemicals Limited •Tata Chemicals •Asian Paints •Ciba •Rallis •Hindustan Organic Chemicals (HOCL) •Reliance Industries Limited (RIL) Source:

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Global Chemical Industry Global Chemical Industry = $2.4 trillion • • • •

Europe 36% China 10% India 2% NAFTA 25%

Source: “CEFIC Facts & Figures Report,”

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Global Competitors (

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FTP Provisions •

Duty free import of specialized inputs /chemicals and flavoring oils is allowed to the extent of 1% of FOB value of preceding financial year’s export.

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Export of Special Chemicals, Organisms, Materials, Equipment and Technologies shall be subject to fulfillment of the conditions indicated in ITC(HS).

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Exports and Imports shall be free, except where regulated by FTP or any other law in force.

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The procedure for facilitating foreign direct investment has been simplified. Most of the chemical items fall under the RBI automatic approval route for FDI/NRI investment up to 100 per cent.

Source:

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Tariff on chemicals

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Recommendations •

World is becoming increasingly competitive & only the best & the most competitive will survive. Incentives should be made available to the industry where Larger MNCs start to have a direct and noticeable effect.

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Even though India enjoys an abundant supply of basic raw materials, it will have to build upon technical services and marketing capabilities to face global competition and increase its share of exports.

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As the Indian economy was a protected economy till the early nineties, very little large-scale R&D was undertaken by the Chemical industry to create intellectual property. The Industry would, therefore, have to make large investments in R&D to

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Quality Standards

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Future Prospects

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Source: KPMG Report

References •Department of chemicals and petrochemicals, Chem Report 2008 •Overview of the chemical industry, KPMG report 2008 •Organic chemicals annual review, Crisil Research, December 2008 •Datamonitor, Chemicals in India, October 2007 •WTO international trade statistics, 2007 Websites www.chemindia.org http://commerce.nic.in/trade/national_ftpp.asp?id=3&trade =n http://en.wikipedia.org/wiki/Chemical_industry explore.oneindia.in/detail/2/chemicals-nic-in.html 22