Niti Aayog: Chemical Industry - Powering India’s Participation in Global Value Chains

SDG 9: Industry, Innovation, and Infrastructure

SDG 12: Responsible Consumption and Production

Institutions: Ministry of Chemicals & Fertilizers; Ministry of Commerce & Industry

The report articulates a vision for the Indian chemical sector to rise as a global manufacturing powerhouse by scaling from a 3.5% share in global chemical value chains (GVCs) in 2023 to 5–6% by 2030, and 10–12% by 2040, targeting a USD 1 trillion output. It highlights structural challenges - such as a USD 31 billion trade deficit in chemicals, heavy reliance on imported feedstock, fragmented industrial clusters, poor infrastructure, low R&D investment (0.7% vs global 2.3%), regulatory bottlenecks, and a 30% skilled labor shortage - hindering global competitiveness.

The report prescribes seven strategic interventions: establishing world-class chemical hubs through dedicated infrastructure funding and governance; upgrading port facilities via a specialised chemical committee; introducing an Opex subsidy scheme tied to import substitution and export potential; boosting R&D through an interface agency and international collaborations; streamlining environmental clearances with transparent audits; negotiating chemical-specific provisions in FTAs; and enhancing skilling via ITI expansion, vocational training, and industry-academic linkages. The roadmap also estimates creation of 0.7 million skilled jobs by 2030, doubling production and significantly improving the trade balance in chemicals. This initiative aligns with India’s broader industrial and employment growth imperatives within the GVC framework.

Follow the full report here:

https://niti.gov.in/sites/default/files/2025-07/NITI-Aayog-Chemical-industry-report.pdf