The document discusses the impact of chemical exports on India's balance of payments. It notes that chemical exports contribute significantly to India's GDP and that India is a major global exporter of chemicals. The chemical industry is diversified and includes sectors like agrochemicals, polymers, and fertilizers. The government has implemented several initiatives to boost the chemical sector through policies like production-linked incentive schemes and developing chemical clusters to promote manufacturing and exports. Chemical exports have benefited India's balance of payments by bringing foreign currency into the country.
Transcript: New from BookNet Canada for 2024: BNC BiblioShare - Tech Forum 2024
Impact of Chemical Exports
1. 1sT ASSIGNMENT OF COMPUTER
SUBMITTED TO:
DR. POORNIMA JYOTI SINGH
SUBMITTED BY:
MUSKAN JAIN (2241301)
NANCY PRIYA(2241304)
NEHA CHAUDHARY(2241311)
RAJNANDINI RATHORE(2241365)
MBA 1st YEAR
I
IMPACT OF CHEMICALS EXPORT’S ON
INDIAN’S BALANCE OF PAYMEMT.
2. INTRODUCTION OF CHEMICAL INDUSTRY
● Covering more than 80,000 commercial products, India’s chemical
industry is extremely diversified and can be broadly classified into
bulk chemicals, specialty chemicals, agrochemicals,
petrochemicals, polymers and fertilisers.
● Globally, India is the fourth-largest producer of agrochemicals after
the United States, Japan and China. India accounts for ~16% of the
world production of dyestuffs and dye intermediates.
● The domestic chemicals sector's small and medium enterprises are
expected to showcase 18-23% revenue growth in FY22, owing to
an improvement in domestic demand and higher realisation due to
high prices of chemicals.
● India’s proximity to the Middle East, the world’s source of
petrochemicals feedstock, enables it to benefit on economies of
scale.
3. This balance of payment(BOP), is the method countries use to monitor all
international monetary transactions at a specific period. Usually, the BOP is
calculated every quarter and every calendar year.
All trades conducted by both the private and public sectors are accounted
for in the BOP to determine how much money is going in and out of a
country. If a country has received money, this is known as a credit, and if a
country has paid or given money, the transaction is counted as a debit.
Theoretically, the BOP should be zero, meaning that assets (credits) and
liabilities (debits) should balance, but in practice, this is rarely the case.
Thus, the BOP can tell the observer if a country has a deficit or a surplus
and from which part of the economy the discrepancies are stemming.
INTRODUCTION OF BALANCE OF PAYMENTS
5. EXPORT DESTINATION
● India exports chemicals and chemical products to more
than 175 countries with key export destinations like
China, USA, Brazil, Netherlands, Saudi Arabia,
Indonesia, UAE, Japan, Germany, etc.
● China is a major importer of dyes, dye intermediates and
organic chemicals from India.
● USA remained the largest importer of essential oils,
inorganic chemicals while Brazil was the top importer of
agrochemicals from India. India’s Cosmetics, Soap &
Toiletries exports to USA were the highest among all the
key export destinations from India.
6. EXPORT TREND
● India is among the top chemical exporting countries in
the world. India exports inorganic and organic
chemicals, tanning and dyes, agrochemicals, plastics,
synthetic rubber, filaments, etc.
● India’s chemical exports promotion council, has also
taken major efforts by using grant in aid under market
access initiative scheme, organizing B2B exhibitions in
different countries, exploring new potential markets
through product-specific marketing campaigns with the
active involvement of Indian embassies, providing
financial aid in statutory compliance in overseas product
registration, etc.
7. MARKET SIZE
• It is a fast growing and diversifying industry in India.
• It contributes approximately 7% of total India GDP.
• It is 3rd largest in Asia and the 6th largest in world in term of its size.
• Basic chemicals are usually produced in large quantities and these chemicals are crucial products that
will be used in the industrial and consumer sectors. Inorganic chemicals are chemical compounds that
lack carbon-hydrogen bond while organic chemicals are chemical compounds that contain carbon-
hydrogen bond. Acetic acid, ethanol, phenol, urea, benzene, ethylene, and methanol are some
examples of organic chemicals that are used in applications such as vinegar production,
pharmaceuticals, paints & adhesives Inorganic chemicals are used in applications such as
pigmentation, semiconductor, fuel, medicine, and chemical industry.
• The increase in demand for a wide range of consumer goods has surged the growth of the chemical
industries in both developed and developing economies
8. The Indian chemicals industry stood at US$
178 billion in 2019 and is expected to reach
US$ 304 billion by 2025 . The demand for
chemicals is expected to expand by 9% per
annum by 2025. The chemical industry is
expected to contribute US$ 300 billion to
India’s GDP by 2025.
9. GOVERNMENT INITIATIVE
● Under the Union Budget 2022-23 the government allocated Rs. 209 crores (US$ 27.43 million) to the Department of
Chemicals and Petrochemicals.
● PLI schemes have been introduced to promote Bulk Drug Parks, with a budget of Rs. 1,629 crores (US$ 213.81
million).
● The Government of India is considering launching a production linked incentive (PLI) scheme in the chemical sector
to boost domestic manufacturing and exports.
● A 2034 vision for the chemicals and petrochemicals sector has been set up by the government to explore opportunities
to improve domestic production, reduce imports and attract investments in the sector. The government plans to
implement production-link incentive system with 10-20% output incentives for the agrochemical sector; to create an
end-to-end manufacturing ecosystem through the growth of clusters.
10. HOW CHEMICAL EXPORT AFFECTS INDIAN GDP
The chemical industry of India is a major industry in the Indian economy and as of
2022, contributes 7% of the country’s Gross Domestic Product (GDP)
India is the world’s sixth largest producer of chemical and the third largest in Asia.
The value of the Indian chemical industry was estimated at $100 billion dollars in
2019.
The chemical industry of India generates employment for five million people
Indian chemical industry account about 14% of production in Indian industries
12. CONCLUSION
With the assistance of the Indian government, the chemical industry in India
experienced significant expansion. The industry has developed over time into a world-
class chemical industry that is well-prepared for international competition through the
creation of novel molecules, technological advancements, improvements in product
quality, and the introduction of new product profiles. Even in a period of increased
global unpredictability, the industry continues to be a desirable location for prospects.
Global dynamics that have an impact on the chemical industry may present lucrative
opportunities for the Indian chemical industry in the not-too-distant future. The
strategic decision to prioritize and realize this potential for value creation will
determine the chemical industry’s future direction and trade performance in India.