The Indian chemical sector accounts for 13-14% of the total exports and 8-9% of total imports of the country.
Chemicals Sector in India
The Indian Chemical Industry is relatively mature and versatile. Almost all segments, such as
organic chemicals, inorganic chemicals, agrochemicals, coatings, dyes and pigments, soaps and
cosmetics, pharmaceuticals, fertilisers and speciality chemicals, have a sizeable presence.
Chemical industry is an important constituent of the Indian economy. As per the latest available
information from industry associations, the size of the Indian Chemical Industry in the year 2010
was £69 billion, which is equivalent to about 3% of India’s GDP and employs 1 million people.
The Indian chemical sector accounts for 13-14% of the total exports and 8-9% of total imports of
the country. According to the Department of Chemicals (in terms of volume) the Indian
chemicals industry is the 12th largest in the world and 3rd largest in Asia. Currently, per capita
consumption of products of chemical industry in India is about 1/10th of the world average.
Petroleum, Chemicals & Petrochemicals Investment Regions (PCPIRs).
The Government of India has approved PCPIR of three potential chemical states which are
Andhra Pradesh, Gujarat, West Bengal and Orissa
Latest export opportunities in Chemicals sector
Latest export opportunities in India
Getting into the market
A new entrant to the Indian market can decide on one of the following options depending on the
expected volume of business, the nature of business (whether it’s a commodity or a speciality
chemical), market potential and its long term strategy for the Indian market.
1. To appoint a Distributor: For many companies this is the most ideal entry option. This
does not require much in the way of resources. But the selection of the right distributor is
essential. For most industrial products, one exclusive indenting agent or distributor is the
most common arrangement.
2. Liaison Office: A Liaison office is free to undertake market development activities but is
not allowed to transact any business (read/raise invoices). Expenses of these type of offices
must be met through inward remittances from the head office abroad. The Reserve Bank of
India grants approval for the opening such offices.
3. Branch Office: Foreign companies engaged in manufacturing and trading activities abroad
may set up a branch office to undertake buying and selling activities in India. This could
include technical support and professional consultancy services but it is not allowed to
undertake manufacturing activities. Permission from the Reserve Bank of India is required
to set up a branch office.
4. Joint Venture/Wholly Owned Subsidiary: A foreign company can commence operations
in India through incorporation of a company under the provisions of the Indian companies
Act (1956). Foreign equity in such companies can be up to 100% depending on the
business plan of the foreign investor and investment policies of the Government. In most
cases foreign investments can be approved through the automatic approval route by the
Reserve Bank of India. Some cases that do not meet the standard guidelines require
specific approval from the Foreign Investment Promotion Board.
Before signing any agreement, it is advisable for any foreign company to consult a lawyer.
More about doing business in India
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke
market research and support during overseas visits though our chargeable Overseas Market
Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists
in country - or contact your local international trade team.
Pradnesh Desai, British Deputy High Commission, Mumbai, India
Tel: +91 (0)22 66502226 or email: email@example.com
Contact your local international trade team
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to
overseas markets and support for attendance at overseas trade shows.
Latest events in Chemicals sector
India Chem 2012
Date: 4-6 October 2012
Website address: www.indiachem.in
Date: 11-12 April 2013
Website address: www.chemspecevents.com/india
More about OMIS and other UKTI services for exporters