India is now seen as one of the major global chemicals suppliers along with China. The favorable pre-growth environments coupled with easy access to international markets and ease of doing business are some of the key factors which are driving India’s chemical industry growth. Furthermore, the Indian government's move to create Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs) are attracting substantial investment in the sector. In this article, we highlight 3 major export Trends in India’s Chemical Industry.
1. Shift To Higher Value Products
The first and most visible trend has been the shift from traditional low-value products to higher-value products. Processed petroleum oils, cyclic carbons, and pharmaceuticals are among the top 10 Indian chemical exports. Mineral fuels including oil registered an export growth of 34.5% during the last FY.
2. Increased Demand From Europe
Traditionally the USA has been one of the major exporters of Indian chemicals but Europe is fast catching up. Along with Europe, India’s chemical export to North American countries has also increased.
As far as Asia is concerned, India’s export to west Asian countries has declined by nearly 5%. however, there has been a strong spike in export volumes to countries like Bangladesh, Sri Lanka and those in the North-East Asia region.
3. Focus on Tackling Commoditization
Commoditization is one of the major challenges that Indian chemical exporters have to face in global markets. Commoditization of previously well-performing product portfolios has resulted in stronger competition and tighter profit margins. Indian chemical suppliers are looking at ways to improve existing production models for improving product value and customer buying experience.
The last few years have witnessed some major changes in cross border trade policies. The impact of these changes on the global chemical industry landscape is equally visible. Traditionally policies of open and free trade are now being revisited and tariffs are being implied by even countries like the USA to fuel domestic investment in manufacturing and other sectors. Digital solutions too are proving important aggregators for growth, productivity, and transparency across industries. The chemical industry in India must not be considered immune to these trends. Although the current environment is favorable for the industry, it must remain vigilant and prepared for any unforeseen yet major shifts in global trade and commerce.
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