Chairman’s Message
Dear Stakeholders,

The Indian economy sharply bounced back in FY 2021-22, with robust GDP growth of 8.7% after 6.6% contraction reported in the previous year due to restrictions and lockdowns imposed by the Government to control the spread of COVID-19 pandemic. Government expenditure and domestic spending has supported the economy, complemented by a long-term focused growth oriented budget. The initiatives undertaken by the Government in the recent past, such as the commodity-intensive National Infrastructure Pipeline (NIP) and Production Linked Incentive (PLI) scheme to boost local manufacturing, will play a big role in making India a manufacturing hub for global majors. This is encouraging, and such bold and scalable programmes are instrumental in realising the vision of a self-reliant India.

Indian chemical industry performance

According to CRISIL, the Indian Speciality chemicals industry will outpace its Chinese counterpart and double its share of the global market to ~6% by 2026 from 3-4% in fiscal 2021. This will drive a strong revenue growth of 18-20% this fiscal and 14-15% in the next fiscal, compared to single-digit growth reported in the previous two fiscals.

The chemical industry across the globe is undergoing a strategic shift in supply chain from China to other countries including India. This presents huge opportunity for India to showcase their expertise and become a global hub for chemical manufacturing. China emerged as a global manufacturing giant in recent decades. Since 2000, its chemical production capacity has increased eightfold. However, in recent years, capacity reductions as a result of increasing environmental compliance of chemical facilities, a trade war with the US, and, most recently, COVID-19 crisis-led lockdowns and Russia-Ukraine war have led companies to adopt a China+1 strategy. With supply chain disruption and uncertainty in China, global players are looking to diversify their sourcing, and India provides strong alternatives with similar scale, technology, raw materials, and supportive Government policies.

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