The specialty chemicals market has been growing exponentially, and the industry in India is projected to grow at a CAGR of more than 12 per cent from 2020 to 2025. Opportunities are replete for both domestic and multinational manufacturers as there has been significant demand from end-user sectors such as food, automobile, real estate, clothing, cosmetics, among others. This is likely to continue to boost the industry’s growth in India and subsequently outpace the rest of the world in the coming years.
The specialty chemicals market represents 22 per cent of India's overall chemicals and petrochemicals market and is valued at USD32 billion. In terms of trade, specialty chemicals account for a significant portion—more than 50 per cent of all chemical exports. The exports of India’s top 10 specialty chemical manufacturers have also grown at a CAGR of 20+ per cent between FY15-FY20.
The emergence of the Indian specialty chemicals market has been driven by the country’s strong process engineering capabilities, low-cost manufacturing capabilities, and abundant manpower. Further, government initiatives such as the petroleum, chemicals, and petrochemicals investment region (PCPIR) policy and production-linked incentive (PLI) schemes have strengthened the confidence of manufacturers to invest within the country.
As pollution control regulations become stringent and labour costs become higher in other countries, manufacturers are looking to diversify their production capabilities. Due to this, global manufacturers are considering alternatives, and India’s favourable ecosystem is positioning itself well as a viable option, poising the Indian specialty chemicals market for substantial and rapid growth.
As the market is evolving, factors such as investor confidence, corporate spending, portfolio decisions and budget allocation will play a crucial part. Focus on aspects such as research and development, capital investments, acquisitions, economies of scale, and expanding the domestic market will be of key importance to drive sustainable growth for the industry in India.
