India Specialty Chemicals Market Outlook to 2028

India Specialty Chemicals Market Overview

• The India specialty chemicals market reached a valuation of USD 44 billion in 2023, driven by increasing demand from key industries such as pharmaceuticals, agrochemicals, and personal care. The growing focus on sustainable and high-performance chemicals has boosted market expansion. The market is also witnessing rising domestic consumption and strong export performance.

• The key players in the India specialty chemicals market include Aarti Industries, SRF Ltd., Atul Ltd., UPL Ltd., and Navin Fluorine International Ltd. These companies dominate the market due to their extensive product portfolios, investments in research and development, and large-scale production capabilities that cater to both domestic and international markets.
• Major cities driving the India specialty chemicals market include Mumbai, Gujarat, and Chennai. Mumbai and Gujarat lead due to the concentration of chemical manufacturing hubs, proximity to ports, and access to key raw materials. Chennai has seen significant growth due to the thriving automotive and pharmaceutical industries in the region.
• The company announced plans for a substantial investment ranging fromUSD 302.32 million(INR 2,500 crore) toUSD 362.79 million(INR 3,000 crore) inAugust 2023. This investment is aimed at expanding its production capabilities to meet the growing demand for specialty chemicals, particularly in pharmaceuticals and agrochemicals

India Specialty Chemicals Market Segmentation

India Specialty Chemicals Market is segmented into further categories:

• By Product: The India specialty chemicals market is segmented by product type into agrochemicals, water treatment chemicals, construction chemicals, and personal care ingredients. In 2023, agrochemicals dominated the market due to the countrys focus on improving agricultural productivity through the use of advanced crop protection solutions. The increased demand for fertilizers and pesticides is also boosting the agrochemical segment.

• By End-User: The India specialty chemicals market is segmented by end-user industries into pharmaceuticals, automotive, agriculture, and textiles. In 2023, pharmaceuticals dominated the market owing to the rising demand for specialty chemicals used in the production of APIs and excipients. The pharmaceutical sectors growth is fueled by Indias dominance in the global generics market and increased demand for advanced drug formulations.

• By Region: The market is segmented into North, South, East, and West India. In 2023, West India dominated the market due to the presence of chemical industry hubs in Maharashtra and Gujarat. The strong industrial base, access to raw materials, and proximity to ports for export activities contributed to West Indias market leadership.

India Specialty Chemicals Market Competitive Landscape

• Atul Ltd.: In the fiscal year ending March 2023, Atul Ltd. reported a1% increasein sales, reaching5,002 crore. This growth was primarily driven by a19% increasein the Life Science Chemicals (LSC) segment, particularly in the Crop Protection sub-segment, which saw improved sales prices and volumes. However, the Performance and Other Chemicals (POC) segment experienced a decline of about6%due to lower sales volumes in certain sub-segments
• UPL Ltd: UPL Ltd. announced plans inJune 2023to transfer its Specialty Chemicals business, including active ingredients manufacturing, to its wholly-owned subsidiary, UPL Specialty Chemicals Ltd. (USCL), for a total consideration of3,572 crore. This transaction is structured as a slump sale and aims to unlock shareholder value and accelerate growth in the specialty chemicals segment. The transfer process is expected to be completed within3 to 4 monthsfrom shareholder approval

India Specialty Chemicals Industry Analysis

India Specialty Chemicals Market Growth Drivers

• Agricultural Demand: Indias agricultural sector drives a significant portion of the demand for agrochemicals. By 2024, the country is expected to consume 1.25 million metric tons of agrochemical products, fueled by the need for improved crop yields and food security. This growth is further supported by government policies aimed at enhancing agricultural productivity.
• Pharmaceutical Sector Expansion: The growth of Indias pharmaceutical industry, valued at INR 6.7 trillion in 2023, continues to fuel demand for specialty chemicals used in APIs and excipients. With incentives under the 2024 PLI scheme, the sector is poised for further expansion, benefiting the specialty chemicals market.
• Sustainable Chemicals Adoption: The shift towards eco-friendly and sustainable chemicals in sectors like water treatment and personal care is another growth driver. In 2023, the adoption of green chemical solutions increased due to regulatory pressures and consumer demand for environmentally friendly products.

India Specialty Chemicals Market Challenges

• Compliance Costs: Stricter environmental regulations introduced by the Ministry of Environment in 2024 have raised compliance costs for chemical manufacturers. Smaller companies, in particular, face increased operational expenses due to the need for environmental compliance, which adds to their operational burden.
• Import Dependency: Despite efforts to boost domestic production, India remains dependent on imports for key chemical intermediates, particularly from China. This reliance creates vulnerabilities in the supply chain and affects the production capabilities of local manufacturers.

India Specialty Chemicals Market Government Initiatives

• National Chemical Policy (2022): In 2022, the Ministry of Chemicals and Fertilizers introduced the National Chemical Policy, focusing on promoting sustainable and green chemical manufacturing. The policy provides funding for research and development in eco-friendly chemicals and encourages companies to adopt less toxic and more sustainable processes. The government allocated INR 3 billion for research in biodegradable chemicals, targeting sectors such as water treatment and agrochemicals.
• Production Linked Incentive (PLI) Scheme (2023): The Government of India launched the PLI Scheme in 2023, allocating INR 1.97 lakh crore. for the chemicals and petrochemicals sectors. This initiative aims to boost domestic production of specialty chemicals used in pharmaceuticals, agrochemicals, and personal care industries. The scheme provides financial incentives to manufacturers to enhance production capacities, reduce import dependency, and promote exports.

India Specialty Chemicals Market Future Outlook

The India Specialty Chemicals Market is expected to grow steadily through 2028, driven by rising demand across sectors such as agriculture, pharmaceuticals, and personal care. Government policies like the PLI Scheme and National Chemical Policy will continue to boost domestic production and foster innovation in sustainable chemicals.

Future Market Trends

• Sustainable Chemical Innovations: Over the next five years, the market will witness an increase in sustainable chemical solutions, particularly in sectors like water treatment and agriculture. Companies are expected to invest heavily in the development of biodegradable and eco-friendly chemicals to meet regulatory demands and consumer expectations.
• Increased Focus on Export Growth: Over the next five years, Indias specialty chemicals market will focus on expanding exports, particularly to Europe and North America, where demand for high-performance and sustainable chemicals is growing. The governments push to reduce import dependency and enhance domestic production capacity will further support this trend.