Downloaded 29 times
Uploaded byVibrant Gujarat
Chemical and Petrochemical Sector
The chemical and petrochemical sector in India generated a turnover of approximately USD 144 billion in FY14, accounting for 2.11% of the national GDP, with Gujarat emerging as a key hub responsible for a significant portion of the country's production and exports. Despite being the third largest chemical industry in Asia and sixth globally, India remains a net importer of chemicals, indicating substantial untapped market potential. The government is fostering industry growth through supportive policies, infrastructure development, and incentives for specialty and fine chemicals.
More Related Content
Similar to Chemical and Petrochemical Sector
Chemical and Petrochemical Sector
- 1.
- 2.
- 3. ChemicalsSector:India Scenario For FY14,Chemical industry's current turnover was about USD 144 billion which constituted2.11% of the national GDP 0 2000 4000 6000 8000 10000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 7423 7651 9107 9395 9440 9627 Production of major chemicals (000'MT) Production of major chemicals (000'MT) 68% 9% 17% 2% 3% Production share of major chemicals FY15 Alkali Chemicals Inorganic Chemicals Organic Chemicals Pesticides Dyes & Dyestuffs • Indian chemical industry ranks 3rd largest in Asia and 6th in the worldby output • Total production in the Indian chemical industrywas 9,627MT in FY14,a 2 percent rise overFY13 • With 68 percent ofthe total productionshare,alkali chemicalsform the largest segment in the Indian chemical industry • India’s growing percapita consumptionand demandforagriculture-related chemicalsoffers huge scope ofgrowth forthe sectorin the future • In India, consumptionofpetrochemicalproducts is stillone ofthe lowest in theworld; hencethere is a huge untapped potentialin this sector Source: Department of Chemicals & Petrochemicals, Govt. of India
- 4. Segments & characteristicsof India’s chemicals sector Key segments of IndiaChemicalIndustry Base chemicals Petrochemicals, man- made fibres, industrial gases, fertilizers, chlor- alkali and other organic and inorganic chemicals Specialty chemicals Dyes and pigments, leather chemicals, construction chemicals, personal care and other specialty chemicals Pharmaceuticals Active Pharmaceutical Ingredients (APIs) and formulations Agrochemicals Insecticides, herbicides, fungicides and other crop protection chemicals Biotechnology Bio-pharma, bio- agri and bio- industrial products Characteristics of India Chemical Industry High domestic demand potential Focus on new segments such as specialty and knowledge chemicals Gujarat and Maharashtra have emerged as most favored zones Fragmented industry Increase in focus on R&D Source: KPMG, TSMG
- 5. Chemicals Exports andImports Exports have been rising over the year but still India is a net importer ofchemicals 0 2 4 6 8 10 12 14 16 18 6.3 7.7 9.1 11.2 11.4 13 16.1 12.4 12.6 12.7 Chemical exports of India (USD billion) Chemical exports of India (USD billion) 0 5 10 15 20 25 7.5 8.8 11.3 15.6 16 19.5 24 10.1 18 19 India's chemical imports (USD billion) India's chemical imports (USD billion) • Total exports ofchemicalsgrew from USD6.3 billion in FY06 to USD 12.7 billionin FY15 • India has been a majorimporterofchemicals; the sectormadeup 7.6 percent ofIndia’s total imports in FY15 • Total importsofchemicalsgrew from USD7.5 billion in FY06 to USD 19.0 billion in FY15 • In 2015-16, organicchemicals constituted 44.05per centof India’s total chemicalexports, followed by dyes &dyestuffat 18.07 percent Source: FICCI, Department of Chemicals & Petrochemicals – Gov. of India
- 6.
- 7. Gujarat: Hub forchemical industry Gujarat, the hub of chemical industry inIndia, accounts for 62 % of India’s petrochemical production, 35% of other chemicals productionand 18% of India’s chemical exports • The chemical industry in Gujarat is a significant component of State's economy with revenues at ~ INR 4,50,000 crore in 2012 • Gujarat's chemical & petrochemicals industry comprises of about 500 large andmedium scaleindustrial units, about 16,000 of smallscale industrialunits and other factory units • Government support, worldclass infrastructure,strategic location,availability of skilledworkforceandraw material makes Gujarat a preferredlocationforchemical plants • Over 6500 chemicals & petrochemicals are produced inthe state • Largest supplierof bio fertilizers, seeds, urea andotherfertilizers • Also Gujarat has taken the leadto promote environment friendly practices throughEffluent Treatment Plant; currently 28 suchplants are operational andfurther 6 are proposed Source:FICCI, Department of Chemicals & Petrochemicals – Gov. of Gujarat;GPCB 91% 58% 51% 50% 42% 38% 35% Soda ash Polymers Acetic acid Ethylene Caustic Soda LAB Methanol Gujarat’s share in India’s production ofmajor chemicals
- 8. Chemicals and Petrochemicalscomplexes Refineries (93 MMTPA) IOCL RIL Essar Chemical and LNG terminal (20 MMTPA) Petronet LNG terminal Dahej LNG Hazira Chemical port terminal Dahej Petroch emical complex es IPCL RIL ONGC Chlor Alkali plants GACL IPCL UPL Shriram Atul Indian Rayon Soda Ash plants Tata Chemicals Gujarat Heavy Chemicals Nirma Saurashtr a Chemicals Dhrangad hra Chemicals Chemical Fertilizer plants IFFCO UPL GSFC GNFC KRIBHCO Agro Chemicals Baroda Agro Aristo Biotech Super Crop Safe Ltd Excel Crop Care Some of the largest chemicals & petrochemicals complexes ofWorldare present in Gujarat
- 9. Petroleum, Chemical &Petrochemical Investment Region (PCPIR) PCPIR is a specifically delineated Investment Regionplanned for the establishment of productionfacilities for petroleum,chemicals and petrochemicals Abundance of Natural Resources Quality Resources Legal Framework Well Defined Infrastructure Export Promotion Measure PCPIR: Unique Selling Proposition Location • Spread over453 sq km ofbrown-field area in the coastal belt ofGulfof Khambhat in BharuchDistrict • Vicinity ofotherexisting GIDC chemicalestates,viz. Jhagadia, Ankleshwar, Panoliand onsitechemical port terminal &LNG terminal at Dahej • The proposed SEZ in PCPIR includes, petrochemicaland downstream petrochemicalindustries,synthetic organic chemicals, industrial gasproducingindustry, packaging industry, shipbuilding/fabricatingunit and othersmall chemical industries Source: Gujarat Industrial Development Corporation
- 10. PCPIR Advantage Export promotion measures Chemical port terminaland chemical storage facility at Dahej Well established infrastructure Notified and Operational Dahej SEZ Quality workforce, peaceful labour, least man days lost Regulatory Framework Gujarat SIR Act, 2009 Gujarat SEZ Act 2004 Notified Area Authority under GIDC Act, 1962 Gujarat Town Planning and Urban Development Act, 1976 Gujarat Infrastructure Development Act, 1999 Availability of natural resources Concentration of Petroleum, Chemical and Petrochemical estates across the district Rich natural resources and feedstock availability Source: Gujarat Industrial Development Corporation Location advantage Road and rail Airportconnectivity Support infrastructure • With a capacity of 35 MMTPA, Dahej port is present in the region* • The anchorage is at a distance of 5 km from the old port and 6 km from a container terminal in Jageshwar, Bharuch • National Highway 8 passes through the district, connecting it with Ahmedabad (182 km) and Mumbai (362 km), along with the DMIC • Delhi-Mumbai broad gauge railway line, Bharuch-Dahej railway line • The nearest airport is present in Vadodara which is 100 km away from the region. • Ahmedabad International Airport is 200 km • LNG terminal, liquid fuel jetty and solid cargo jetty • Two 220 KV power sub-stations at Dahej and Vilayat, three 66 KV sub-stations at Dahej, Luna and Vilayat • Water Supply by GIDC and GWSSB; Gas Supply by GGCL *includes Private Port and Captive jetty capacities
- 11. Policy interventions GujaratIndustrialPolicy 2015 ThrustSectors Plastics Industrial infrastructure Specialty and fine chemicals Auto and Auto Components Food and Agri Business Incentives Various Sector specific Separate set of incentives for MSME Scheme for assistance for Start- ups/ Innovation HR/Labor Promotion of labor intensive industries Support to young entrepreneurs Facilitate Centers of Excellence and specialized sectors for skill enhancement Business Environment Ease of Doing Business Single window clearance Market Development Initiatives Trade Facilitation centers Infrastructure Facilitation of Large/ Mega Projects Support for industrial and connectivity infrastructure Improvement of environmental infrastructure Source: IBEF, Gujarat Industrial Policy 2015 •In Chemical Sector, 100% FDI is permissible in India. Manufacture of most chemical products inter-alia covering organic / inorganic, dyestuffs & Pesticides is de-licensed •The entrepreneurs need to submit only IEMwith the Department of Industrial Policy & Promotion, Govt. of India. •Hazardousproducts come under compulsory licensing policy Licensing Policy •Customs Duty on most Organic, Inorganic Chemicals, Pharmaceuticals, Fertilizers and other miscellaneous chemicals is 7- 10% in India Custom Duty • Excise duty in Indiahas beenreduced;now to the tune of ~10%Excise Duty • VAT on most chemicalsreduced to 5% inGujaratVAT Duty As per Industrial Policy2015, Government of Gujaratprovidessupport fordevelopment ofSEZs, SIRs and Petroleum, Chemicalsand Petrochemicals Investment Region(PCPIR) to encouragethe investments in chemicals sector.
- 12. Proposed interventions The StateGovernment givesthe following incentivesforthe manufacturing units ofSpecialty and Fine Chemicals: • Graded interest subsidy forfive years@ 7% forMSMEsand 2% forlarge industrieshavingan actual investment up to INR 100crores with maximumcap ofINR 25 lakhs (forMSMEs)and INR 50 lakhs (forlarge units) • An Industrial Park comingup in private area/ GIDC estate(with minimum 25 industrial units) will be provided incentiveof 50% of total expenditure limited to INR 20 crores • One time assistanceup to 80%of thetotal expenditure limited to INR 10 crores forthe cost of plant & machinery testingequipment • Assistance upto 75%of totalproject cost i.e. building, plantand machinery,civil construction and otherfixed assets neededforthe project and as approved by SLAC (ifGOI contributionis available).Assistanceupto 40% ifGOI assistance is not given • One time assistanceof 70%ofthe total expenditure limitedto INR 30 crores (in caseof international level CenterofExcellence) • Mega projectwith an actual investmentof atleast INR 1000 crore providing directemploymentto atleast 2000 persons will be incentivized on case to case basis as decided bythe State Level Approval Committee (SLAC)
- 13. Leading playersand InvestmentOpportunities PPFilament Yarn Acrylic Fibres Feedstock Linkages Engineering Polymers Pigments and Coating Products Bio Refineries Textiles Chemicals High Performance Chemicals
- 14. Key contacts IndustriesandMines Department,Govt. of Gujarat IndustriesCommissionerate http://www.imd-gujarat.gov.in http://www.ic.gujarat.gov.in Gujarat IndustrialDevelopmentCorporation Energy and Petrochemicals Department, Govt. of Gujarat http://www.gidc.gov.in http://www.guj-epd.gov.in
- 15. THANK YOU Disclaimer: Industrial ExtensionBureau (iNDEXTb), Government of Gujarat has made every attempt to ensure the accuracy and reliability of the information provided in this document. However, the information is provided "as is" without warranty of any kind. iNDEXTb periodically adds, changes, improves or updates the information in this document without any notice. For further clarification kindly get in touch with Industrial Extension Bureau (iNDEXTb), Government of Gujarat.