India's Chemical Sector Targets $1 Trillion By 2040

New Delhi India's chemicals and petrochemicals industry, currently valued at approximately $220 billion, is projected to grow to $300 billion by 2030 and reach $1 trillion by 2040, according to a government factsheet released on Saturday. India is currently the sixth-largest producer of chemicals globally and the fourth-largest in Asia. Its chemical products serve several key industries, including pharmaceuticals, textiles, construction, automobiles, electronics and consumer goods, making the sector an important contributor to the country's industrial growth. The sector has also witnessed a significant rise in foreign investment. Foreign Direct Investment (FDI) inflows reached Rs 1,04,895 crore between 2014 and 2026, more than double the Rs 45,240 crore recorded during 2004–2014. India allows 100 per cent FDI through the automatic route in most chemical sectors, eliminating the requirement for prior government approval. Production of major chemicals and petrochemicals increased from 45,638 thousand metric tonnes in 2015–16 to 58,617 thousand metric tonnes in 2024–25. India also holds significant positions in specialised chemical manufacturing, ranking as the world's second-largest manufacturer and exporter of dyes and the third-largest exporter of agrochemicals. The industry comprises approximately 13,000 large-scale units and 4.45 lakh micro, small and medium enterprises (MSMEs). To strengthen manufacturing capacity and infrastructure, the Centre has introduced the Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan) Scheme, approved in July 2026. The initiative aims to establish three dedicated chemical parks, each covering at least 2,000 acres. The scheme has a total financial outlay of Rs 3,030 crore, including Rs 3,000 crore for common infrastructure and basic utilities and Rs 30 crore for administrative expenditure. The Centre will provide grants of up to Rs 1,000 crore per park, subject to a minimum state government contribution of Rs 500 crore. The scheme will run for five years, from FY 2026–27 to FY 2030–31, supporting India's ambition to expand its presence in global chemical value chains. “India’s chemical industry is entering a significant growth phase, with rising domestic demand, increased foreign investment and expanding manufacturing capacity creating opportunities for the country to strengthen its position in global markets.” - Government Official (Ministry of Chemicals and Fertilisers). “The development of dedicated chemical parks under the BHAVYA Rasayan Scheme is expected to improve infrastructure, attract investments and support the growth of domestic manufacturers, particularly MSMEs.” - Government Official (Department of Chemicals and Petrochemicals).