**Executive Summary**
This document is an answer given on 06/02/2026 to the Lok Sabha Unstarred Question No. 1246 regarding the growth in demand and production capacity of chemicals in India. It provides data on the output of chemicals and petrochemicals, FDI inflows, and various government initiatives, including the Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) policy, Plastic Parks, Free Trade Agreements (FTA), Centre of Excellence and skill development programs for the sector. The survey of Industries (ASI) for the Financial Year 2024-25 has not been published yet.
**Key Points / Main Content**
* **Output of Chemicals & Petrochemicals:**
* The document provides the output of Chemicals & Petrochemicals in Rs. Crore for the years 2019-20 to 2023-24 based on the Annual Survey of Industries (ASI).
* The highest output was recorded in 2022-23 at Rs. 19,32,057 Crore.
* The sector is largely delicensed, except for a group of three hazardous chemicals.
* **Foreign Direct Investment (FDI):**
* 100% FDI is allowed under the automatic route in the chemicals and petrochemicals sector (excluding fertilizers) for manufacturing and trading activities.
* From April 2000 to September 2025, cumulative FDI equity inflows for the chemicals sector totaled INR 1,47,453.93 crore.
* The document lists FDI equity inflow from chemicals (other than fertilizers) in INR Crore and USD Million from 2020-21 to September 2025.
* **Government Initiatives:**
* **PCPIRs:** The Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) policy aims to attract investments through cluster-based development. Three PCPIRs are operational at Dahej, Vishakhapatnam-Kakinada, and Paradeep, with a cumulative investment of Rs. 3,49,192 crore and employment of 3.7 lakh persons.
* **Plastic Parks:** The Department is implementing a scheme for setting up plastic parks under the New Scheme of Petrochemicals, with government grant funding up to 50% of the project cost, with a ceiling of Rs. 40 crore per project. 9 Plastic Parks have been approved.
* **Free Trade Agreements:** Government is negotiating various CEPAs and other FTAs to integrate the sector with global value chains, including countries such as Oman, the United Kingdom, the United Arab Emirates, European Free Trade Association and Australia.
* **Centre of Excellence:** The Department has a scheme to provide grant-in-aid to educational and research institutions for technology improvement, with financial support up to 50% of the project cost (maximum of Rs. 5 crores). 18 CoEs have been approved.
* **Skilling and Human Resource Development:** The Central Institute of Petrochemicals Engineering & Technology (CIPET) provides skill development, technology support, and academic/research activities with 48 centers across the country. CIPET trained 75,763 persons in 2024-25 and 46,381 persons up to January 15, 2026.
**Impact Analysis**
**Stakeholder: Chemical and Petrochemical Companies**
* **Impact:** The information on market size, FDI inflows, and government initiatives directly impacts investment decisions, production planning, and strategic growth of the companies. The PCPIR and Plastic Park schemes can help consolidate downstream processing capacities and attract investments.
* **Action Required:** Companies should leverage government schemes (PCPIR, Plastic Parks, Centre of Excellence) to expand their operations, improve technology, and enhance skill development.
**Stakeholder: Investors (Domestic & Foreign)**
* **Impact:** The data on FDI and government policies provide insights into the investment climate and growth potential of the Indian chemicals and petrochemicals sector.
* **Action Required:** Investors should consider opportunities for investment in manufacturing and trading activities, taking advantage of the 100% FDI policy and the PCPIR framework.
**Stakeholder: Government (Ministry of Chemicals & Fertilizers)**
* **Impact:** The data helps in assessing the effectiveness of various policies and initiatives in promoting growth in the chemical and petrochemical sector.
* **Action Required:** The Ministry should continue to monitor the impact of FDI, government schemes (PCPIR, Plastic Parks, Centre of Excellence) and skill development programs, and make necessary adjustments to achieve long-term targets.
**Stakeholder: Educational and Research Institutions**
* **Impact:** The Centre of Excellence scheme offers financial support to improve existing technology and develop new applications in the sector.
* **Action Required:** Leverage Centre of Excellence scheme to modernise and upgrade manufacturing processes and improve quality of products.
Key Entities Referenced
Department of Chemicals & Petrochemicals: The department is taking measures to support the chemicals and petrochemicals sector, including the implementation of the PCPIR policy, Plastic Parks Scheme, Centre of Excellence Scheme, and CIPET.
Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR): A policy conceptualized as a cluster-based model of Development with common infrastructure and support services to attract investments in the chemicals & petrochemicals sector. Three PCPIRs are located in Dahej (Gujarat), Vishakhapatnam-Kakinada (Andhra Pradesh) and Paradeep (Odisha).
Plastic Parks: A Scheme under the New Scheme of Petrochemicals implemented by the Department of Chemicals & Petrochemicals to set up Plastic Parks with requisite state-of-the-art infrastructure and enabling common facilities.
Central Institute of Petrochemicals Engineering & Technology (CIPET): A technical education institution under the Department of Chemicals & Petrochemicals, engaged in skill development, technology support, as well as academic and research activities.
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS & FERTILIZERS
DEPARTMENT OF CHEMICALS & PETROCHEMICALS
LOK SABHA
UNSTARRED QUESTION NO. 1246
ANSWERED ON 06/02/2026
GROWTH IN DEMAND AND PRODUCTION CAPACITY OF CHEMICALS
1246. SHRI BALWANT BASWANT WANKHADE:
Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:
(a) the actual market size of the Indian chemicals and petrochemicals sector at the end of
2025;
(b) whether the projected target of USD 300 billion by 2025 has been achieved, if so, the
details thereof;
(c) the extent of growth in demand and production capacity recorded during the period
leading up to 2025, vis-a-vis earlier projections;
(d) whether the said target has been achieved, if so, the details thereof and if not, the
reasons therefor, including constraints related to investments, infrastructure, policy
implementation or global market conditions; and
(e) the roadmap and policy measures being pursued to achieve the long-term target of USD
1 trillion by the year 2040?
ANSWER
MINISTER FOR CHEMICALS & FERTILIZERS
(SHRI JAGAT PRAKASH NADDA)
(a) to (e): The output for Chemicals and Petrochemicals as per the Annual Survey of
Industries (ASI) done by the Ministry of Statistics & Programme Implementation for last five-
years is given in the table below. It may please be noted that the Survey of Industries (ASI)
for Financial Year 2024-25 has not been published yet.The output for Chemicals & Petrochemicals in Rs. Crore
Year 2019-20 2020-21 2021-22 2022-23 2023-24
Total Output 11,99,309 11,91,354 16,03,219 19,32,057 18,71,943
The chemical sector is largely delicensed except for a group of three hazardous chemicals. The
sector offers substantial opportunities for growth, diversification as it also feeds several
downstream industries such as Agriculture, Fertilizers, Pharmaceuticals, Nutraceuticals,
Electronics, Semiconductors, Textiles, Automobiles, Consumer goods, Construction sector,
etc.
As per the Foreign Direct Investment Policy, 100% FDI under the automatic route is allowed
in the chemicals and petrochemicals sector (excluding fertilizers) for both manufacturing and
trading activities, thereby facilitating investments in the sector. From April 2000 to September
2025, cumulative FDI equity inflows for the Chemicals sector is INR 1,47,453.93 crore,
accounting for 3.11% of total FDI equity inflows into the country. The details of last five years
are as under:
FDI Equity Inflow from CHEMICALS (OTHER THAN
Financial Year
FERTILIZERS) Sector
(April-March)
(In INR Crore) (In USD Million)
(1) (2) (3)
2020-21 6,300.21 847.07
2021-22 7,202.22 965.78
2022-23 14,662.04 1,850.01
2023-24 6,985.32 843.97
2024-25 8,943.45 1,060.56
2025-26 (Up to
4,598.19 534.12
September 2025)
Further, Department of Chemicals and Petrochemicals has been taking various measures to
support the sector. The measures are as follows:
Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR): To attract
investments in chemicals & petrochemicals sector, Department had notified the Petroleum,
Chemicals and Petrochemical Investment Region (PCPIR) Policy. PCPIRs are conceptualized
as cluster-based model of Development with common infrastructure and support services.
Three PCPIRs have been set up at Dahej (Gujarat), Vishakhapatnam–Kakinada (Andhra
Pradesh) and Paradeep (Odisha). Currently, 2,246 chemical units are functional in thesePCPIRs having a cumulative investment of Rs. 3,49,192 crore and these regions have generated
employment of 3.7 lakh persons.
Plastic Parks: The Department implements the Scheme for Setting up of Plastic Parks under
the scheme of New Scheme of Petrochemicals. The Scheme promotes setting up of need-based
Plastic Parks with requisite state-of-the-art infrastructure and enabling common facilities. The
objective is to consolidate and synergize the capacities of downstream plastic processing
industry to help increase investment, production and export in the sector as well as generate
employment. Under the Scheme, the Government of India provides grant funding up to 50%
of the project cost to the State government subject to a ceiling of Rs. 40 crore per project. In
accordance with the Scheme Guidelines, 9 Plastic Parks have been approved so far and the
same are at different levels of implementation.
Free Trade Agreements: Further, various Comprehensive Economic Partnership Agreements
(CEPAs) and other Free trade agreements with different countries and regional groupings have
been negotiated by the Government in the recent years to promote greater integration of the
sector with the global value chains. These countries / regional blocks include Oman, the United
Kingdom, the United Arab Emirates, European Free Trade Association and Australia.
In addition to these infrastructure-led initiatives, the Department has also undertaken the
following initiatives aimed at research and development, technology upgradation, and human
resource development, to promote the sector.
Centre of Excellence: The Department of Chemicals and Petrochemicals has formulated
a scheme on setting up of Centres of Excellence. The objective is to provide grant-in-aid to
educational and research institutions to improve existing technology and promote development
of new applications of polymers and plastics. The emphasis of the Scheme is on modernization
and upgradation of existing manufacturing processes as well as improving the quality of
products. Under the scheme, the Government of India provides financial support up to 50 per
cent of the total project cost subject to an upper limit of Rs. 5 crores. So far, 18 CoEs have been
approved under the Scheme. Earlier, the CoE scheme was only available for petrochemical
sector. Now, the revised scheme includes chemicals sector also.
Skilling and Human Resource Development through CIPET: The Central Institute of
Petrochemicals Engineering & Technology (CIPET) is a technical education institution under
the Department of Chemicals & Petrochemicals, engaged in skill development, technology
support, as well as academic and research activities for the promotion of the petrochemical and
allied industry in the country. CIPET has 48 centers across the country. During 2024-25, CIPET
provided training to 75,763 persons and during 2025-26 (till 15.01.2026), 46,381 persons have
been imparted skill training.
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