CHEMICALS

VIPUL ARORA
SHREY VIRMANI
Overview

 Chemical sector of India is one of the oldest industrial sectors in India. It has
contributed significantly towards the phenomenal growth of Indian industry and
economy.
 The chemical sector of India directly or indirectly acts as a supplier of many of the
commodities of daily use.
 It is extremely scientific in its approach and facilitates the provision of many of the
important chemicals which are the basic materials for end-products like paper,
leather, paint, varnish, textile, and so on.
 The chemical sector in India stands as the keystone of the agrarian and industrial
development which provides support for other industries.
 It is estimated to be worth around US$ 35 billion, which is almost 3% of the country's
gross domestic product.
 The investment in chemical sector of India is around US$ 60 billion.
 It generates employment of about 1 million.

http://www.economywatch.com/world-industries/chemical/india.html
 The chemical sector of India provides around 13-14% of total exports and its total
imports are about 8-9%.
 It is ranked 12th globally and 3rd in Asia.
 The per capita consumption of chemical industry products in India is .01% of the
global average
 One of the fastest growing sectors of Indian economy.

 Chemical Industry in India is fragmented and dispersed - multi product and multi
faceted.

 Chemicals sold directly to large customers and through distribution channels.

Distribution channels mostly consist of stockiest and dealers spread all over India
addressing small segments and retail market.

http://www.economywatch.com/world-industries/chemical/india.html
 The Chemical Industry in India is based on the idea of Diversification. Depending on the product categories
Chemical Industry in India is divided in following sectors:

 Inorganic Chemicals - In this sector the growth rate is near about 9% and the chemicals produced in this
sector are mainly used in alkalis, fertilizers, detergents and glass.
 Organic Chemicals - 1 Billion Dollar industry. Covers a wide range of chemicals. Units concentrated
mostly in the Western India

 Pesticides, Fertilizers and other Agro-chemical products- This sector of the Chemical Industry in India
account for almost 2.5% of the global market. It possesses an impressive domestic market growth rate of
10%.

 Specialty and Fine Chemicals like Dyes and Paints- This sector is characterized by high level of
fragmentation. The sector is involved in production of paints, dyes, inks, polymers and a lot of other chemical
products. The sector has a growth rate of near about 12%.

http://www.economywatch.com/world-industries/chemical/india.html
Export contribution 2008
Domestic Industry

 
http://business.mapsofindia.com/india-petroleum-industry/chemical-sector-in-india.html
Major production centre's :

 Mumbai
 Bulsar
 Pune
 New Delhi
 Hyderabad
 Ahmedabad.
 Baroda
STATE WISE SHARE IN PRODUCTION OF
SELECTED MAJOR CHEMICALS

Source: Ministry of Commerce and

Industry
Trend in Exports
 Exports of chemicals decreased by 1 percent
 Organic/inorganic chemicals showed volume increase.
Inorganic chemicals

 Total export of $823.81 million in

year 2007-08 was recorded.
 % Growth of 2.81
 Major export to China

Organic Chemicals

 Total export of $7,170.71million in

year 2007-08 was recorded.

 % Growth of 25.18
 Major export to USA

http://commerce.nic.in/eidb/ecom.asp
 Fertilizers
 Total export of $25.92 million in
year 2007-08 was recorded.
 % Growth of 138.19
 Major export to Nepal

 Dyes and Paints

 Total export of $1,323.23 million in
year 2007-08 was recorded.
 % Growth of 31.34
 Major Export to Germany

http://commerce.nic.in/eidb/ecom.asp
 Inorganic chemicals : Detergents and glass
 Organic chemicals : Explosives and drugs
 Plastic and petrochemicals : PVC and plastic products
 Dyes and Dyes pigments : Paints, ink and polymer
Major Export Destination for Inorganic
Chemicals

 Major export destinations of inorganic chemicals are CHINA P RP and

USA.

 Total export of the commodity in year 2007-08 was recorded as

USD 7.89 mn

 CHINAP RP accounts for 19.06% of total export of inorganic chemicals

 Second major destination of inorganic chemicals is USA.

 Total export to USA is 6.51% of total export of the commodity.

 Apart from CHINAP RP and USA , inorganic chemicals is also exported to

IRAN ,U ARAB EMTS ,ROMANIA ,INDONESIA ,SRI LANKA DSR
,BANGLADESH P

http://commerce.nic.in/eidb/ecom.asp
http://commerce.nic.in/eidb/ecomxcnt.asp
http://commerce.nic.in/eidb/ecomxcnt.asp
Major Export Destination for Organic
Chemicals

 Major export destinations of organic chemicals is USA.

 Total export of the commodity in year 2007-08 was recorded worth USD
6.87 mn

 USA accounts for 10.86% of total export of organic chemicals

 Second major destination of inorganic chemicals is CHINAP RP.

 Total export to CHINAP RP is 8.72% of total export of the commodity.

• Apart from USA and CHINAP RP , organic chemicals is also exported to

PAKISTAN IR, GERMANY , INDONESIA , KOREA RP , SPAIN , NETHERLAND,
SINGAPORE

http://commerce.nic.in/eidb/ecom.asp
Commodity:  29 ORGANIC
CHEMICALS

Country:  U S A

S.No. \Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

1 Values in USD million 33.6 38.8 54.1 67.05 69.7

2 15.67 39.25 23.8 3.86

%Growth  
3 Total export of commodity 1,297,459.37 2,594,964.01 2,886,978.42

4 25.38 32.19 20.67 11.25

%Growth  
5 %Share of country 11.66 10.76 11.33 11.63 10.86

6 Total export to country 5,279,854.10 6,185,157.26 7,682,808.22 8,536,848.47 8,338,806.90

7 17.15 24.21 11.12 -2.32

%Growth  
8 %Share of commodity 2.87 2.83 3.17 3.53 3.76

http://commerce.nic.in/eidb/ecomxcnt.asp
Commodity:  29 ORGANIC
CHEMICALS

Country:  CHINA P RP
S.No. \Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
1 Values in USD million 22.63 36.1 45.2 52.15 55.9

2 59.89 25.13 15.18 7.32

%Growth  
3 Total export of commodity 1,297,459.37 1,626,741.47 2,150,402.15 2,594,964.01 2,886,978.42

4 25.38 32.19 20.67 11.25

%Growth  
5 %Share of country 7.85 10.01 9.48 9.04 8.72

6 Total export to country 1,357,905.84 2,523,296.89 2,992,491.40 3,752,978.02 4,359,741.55

7 85.82 18.59 25.41 16.17

%Growth  
8 %Share of commodity 7.5 6.45 6.81 6.25 5.78

http://commerce.nic.in/eidb/ecomxcnt.asp
Major Export Destination for Fertilizers

 Major export destination of fertilizers is NEPAL

 Total export of the commodity in year 2007-08 was recorded worth

USD 2.31 mn

 NEPAL accounts for 18.49% of total export of fertilizers

 Second major destination of fertilizers is BANGLADESH RP.

.
 Apart from NEPAL and BANGLADESH RP, fertilizers is also
MALAYSIA ,U ARAB EMTS ,SRI LANKA DSR ,U K ,CHINA P RP
,ITALY ,OMAN ,KUWAIT

http://commerce.nic.in/eidb/ecom.asp
Commodity:  31 FERTILISERS.

Country:  NEPAL

S.No. \Year 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

1 Values in USD million 2 bn 1.8 1.07 1.72 4.28

2 -13.14 -42.55 60.11 149.2

%Growth  
3 Total export of commodity 3,331.30 5,895.60 5,070.19 4,928.68 10,437.32

4 76.98 -14 -2.79 111.77

%Growth  
5 %Share of country 29.09 14.28 9.54 15.71 18.49

6 Total export to country 307,578.76 333,903.93 380,738.81 420,138.23 606,348.08

7 8.56 14.03 10.35 44.32

%Growth  
8 %Share of commodity 0.32 0.25 0.13 0.18 0.32

http://commerce.nic.in/eidb/ecomxcnt.asp
Major Export Destination for Dyes and
Pigments.

 Major export destination of Dyes and Pigments. is GERMANY.

 Total export of the commodity in year 2007-08 was recorded worth USD
11.83 mn

 NEPAL accounts for 11.46% of total export of Dyes and Pigments.

 Second major destination of Dyes and Pigments. Is USA.

.
 Apart from NEPAL and BANGLADESH RP, Dyes and Pigments. is also
ITALY ,CHINA P RP ,TURKEY ,NETHERLAND ,U K,BELGIUM ,BRAZIL
,KOREA RP
http://commerce.nic.in/eidb/ecomxcnt.asp
Export for India from last years

India’s total export in year 2005-06 was $5.95 bn.

India’s total export in year 2006-07 was $10.85 bn

 GROUP - WISE EXPORT & IMPORT
OF CHEMICALS
Group                
  ITC - HS              
Commodity TRADE 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
Level Code    
 
                 
INORGANIC 2 DIGIT- 28 Export 1259 1946 1949 2871 3431 3629
CHEMICALS
*              
Import 5730 5579 5916 8130 10446 11473
 
                 
ORGANIC 2 DIGIT -29 Export 7624 10190 12975 16269 21504 25950
CHEMICALS  
             
Import 8795 10695 14363 18785 22776 27330
 
                 
DYEING, 2 DIGIT -32 Export 2436 2943 3112 3111 3750 4562
TANNING
AND              
COLOURING Import 1138 1344 1617 1878 2245 2720
MATTER  
 
                 
PESTICIDES 4 DIGIT Export 1356 1487 1746 2096 2791 2877
  -3808  
             
Import 362  287  501 712 754 806
   
Chemexcil
 Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion
Council, popularly known as CHEMEXCIL was established in the
year 1963 with it's headquarters at Mumbai, with the objective of
making concerted efforts to promote exports of Basic Organic and
Inorganic Chemicals, Dyes, Pesticides, Soaps, Detergents,
Cosmetics, Toiletries and other products like Essential Oils, Castor
Oil etc.
Provisions in India’s Foreign Trade
Policy
 Expansion of FMS – Focus Market Scheme (FMS) has been
expanded by adding 26 new markets, out of which 16 are in Latin
America and 10 in Asia-Oceania. Incentive under the scheme has
been enhanced from 2.5% to 3%.
 Expansion of FPS – Incentive under the scheme has been enhanced from
1.25% to 2%
 Duty free import of specialized inputs /chemicals and flavoring oils is
allowed to the extent of 1% of FOB value of preceding financial year’s
export.
 Duty exemption and remission schemes-The Government has
been taking various steps for augmenting the export. Some of the
important measures taken by the Government are as follows:-
 Customs Duty
 1.)The peak rate of Customs Duty on most Chemicals is 7.5%
 2.)On basic raw materials like sulphur, rock phosphate, natural
borates is 5%
 3.)On most building blocks & feedstock the duty is 5% (ethylene,
propylene, benzene, toluene, xylene )
 EPCG scheme
 Zero duty EPCG scheme - A ‘zero duty’ EPCG scheme has been
introduced in FTP 2009-14 for a limited period i.e. upto 31-3-2011.The
scheme is available for exporters of basic chemicals.
MARKETING DEVELOPMENT ASSISTANCE SCHEME
Financial assistance is provided for export promotion activities
implemented by EPCs and Trade Promotion Organizations.
Assistance is provided for participation in:

1.Trade Fairs and Buyer Seller meets abroad or in India and

2.Export promotions seminars.
3.Financial assistance with travel grant is available to exporters
traveling to focus areas, viz., Latin America, Africa, CIS region, ASEAN
countries, Australia and New Zealand.
Quality Standards
 ISO STANDARDS FOR CHEMICALS
 Inorganic chemicals: ISO 1552:1976(liquid chlorine) &
ISO 3425:1975( sulphur)
 Organic chemicals: ISO 1995:1981( Aromatic hydrocarbons) &
ISO 5280:1979( Xylene)

 The chemical industry is one of the most regulated activity sectors, where
regulation includes specific quality systems such as good laboratory practice
(GLP), good clinical practice (GCP) and good manufacture practice (GMP).

http://www.nist.gov/public_affairs/chemical.htm
THANK YOU