Executive Summary:
The Ministry of Chemicals and Fertilizers addressed import dependency in India's chemical industry in response to Lok Sabha Unstarred Question No. 1045 on July 25, 2025. The response identifies feedstock constraints and technology gaps as reasons for this dependency. It then outlines government initiatives to promote R&D, global value chain integration, technological upgrades, and process efficiency, particularly for MSMEs, to enhance global competitiveness.
Key Points / Main Content:
Reasons for Import Dependency:
* Feedstock and raw material constraints.
* Technology and innovation gap.
Government Initiatives:
* Centre of Excellence (CoE) Scheme: Provides grants to educational and research institutions (IITs, CSIR Labs, CIPET etc.) for R&D in the chemical and petrochemical sector, up to 50% of project cost, capped at Rs. 5 crores. 18 CoEs have been approved.
* Council of Scientific and Industrial Research (CSIR): Supports R&D, technological upgrades, and process efficiency through its six constituent laboratories, engaging with startups and MSMEs by offering technical support. Focus includes import-reducing technologies and addressing climate change.
* Department of Biotechnology: BioE3 Policy promotes biomanufacturing. Proposals are invited to support R&D in sustainable biomanufacturing within the chemical sector.
* Ministry of MSME: Implements schemes to boost R&D, integrate MSMEs into global value chains, and enhance process efficiency. Includes MSME Champions Scheme (Innovative Incubation, Design IPR Scheme, Competitive LEAN Manufacturing Scheme, Sustainable ZED Certification Scheme), MSE SPICE, and MSE GIFT Scheme.
Impact Analysis:
Educational and Research Institutions (IITs, CSIR Laboratories, CIPET, etc.):
* Impact: Potential to receive funding and support for research and development activities in the chemical and petrochemical sector through the CoE scheme.
* Action Required: Apply for grants under the CoE scheme and actively engage in research projects.
Startups and MSMEs:
* Impact: Opportunity to receive technical support from CSIR and benefit from various schemes under the MSME Champions Scheme (Innovative Incubation, Design IPR Scheme, Competitive LEAN Manufacturing Scheme, Sustainable ZED Certification Scheme), MSE SPICE, and MSE GIFT Scheme to improve processes, adopt new technologies, and integrate into global value chains.
* Action Required: Engage with CSIR for technical support, apply for relevant MSME schemes, and adopt sustainable manufacturing practices.
Chemical and Petrochemical Industry:
* Impact: Potential for overall growth and reduced import dependency through government support for R&D, technological upgrades, and process optimization.
* Action Required: Stay informed about government schemes and initiatives, collaborate with research institutions, and invest in technological upgrades and process improvements.
Department of Biotechnology:
* Impact: Increased focus on promoting biomanufacturing in the chemical sector through the BioE3 Policy.
* Action Required: Evaluate proposals and support R&D in sustainable biomanufacturing within the chemical sector.
Key Entities Referenced
Ministry of Chemicals and Fertilizers: The Indian government ministry responsible for the chemicals and fertilizers sector.
Micro, Small and Medium Enterprises (MSMEs): A category of businesses in India, defined by investment and turnover, that the government is supporting to increase competitiveness in the chemical industry.
Centre of Excellences (CoEs): A scheme by the Department of Chemicals and Petrochemicals to promote research and development in the chemical and petrochemical sector.
Council of Scientific and Industrial Research (CSIR): An Indian research and development organization that supports the chemical industry through technological upgrades and process efficiency.
Department of Biotechnology: A department that introduced the BioE3 Policy to promote biomanufacturing.
BioE3 Policy Biotechnology for Economy, Environment Employment: Policy introduced by the Department of Biotechnology to promote high performance biomanufacturing.
MSME Champions Scheme: A scheme by the Ministry of MSME with components like MSME Innovative Incubation, Design IPR Scheme, MSME Competitive LEAN Manufacturing Scheme, and MSME Sustainable ZED Zero Effect Zero Defect Certification Scheme.
MSE Scheme for Promotion and Investment in Circular Economy (MSE SPICE): A scheme by the Ministry of MSME that supports initiatives aligned with the circular economy.
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS AND FERTILIZERS
DEPARTMENT OF CHEMICALS AND PETROCHEMICALS
LOK SABHA
UNSTARRED QUESTION No. 1045
ANSWERED ON- 25/07/2025
UPGRADATION OF CHEMICAL INDUSTRY
1045 SHRI. K E PRAKASH:
Will the MINISTER OF CHEMICALS AND FERTILIZERS be pleased to state:
(a) the reasons for the continued import dependency in the chemical industry despite
India’s stated potential to emerge as a global leader in the sector; and
(b) the specific initiatives undertaken by the Government to promote research and
development (R&D) support, global value chain integration support, technological
upgradation, and process efficiency in the chemical industry of the country, particularly for
Micro, Small and Medium Enterprises (MSMEs), to reduce such dependency and enhance
global competitiveness?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS AND FERTILIZERS
(SMT. ANUPRIYA PATEL)
(a) The reasons for continued import dependency in the chemical sector are:
a. Feedstock and raw material constraints.
b. Technology and innovation gap.
(b) The Government has taken following measures to promote research and
development (R&D) support, global value chain integration support, technological
upgradation, and process efficiency in the Chemical industry of the country, including
MSMEs:
1. Centre of Excellences (CoEs):
With the objective of promoting research and development efforts in the chemical and
petrochemical sector to develop new molecules and technologies, the Department has
formulated a scheme for setting up of Centres of Excellence. The objective is to provide
Grants-in-Aid to educational and research institutions to improve existing technology and
promote development of new applications of polymers, chemicals and plastics. The
emphasis of the Scheme is on modernisation and upgradation of existing manufacturing
processes as well as improving the quality of products. Under the scheme, the Government
of India provides financial support upto 50 per cent of the total project cost subject to
anupper limit of Rs. 5 crores. So far, 18 CoEs have been approved under the Scheme. The
CoEs are undertaking pioneering research in their chosen fields. These CoEs includes IITs,
CSIR Laboratories, CIPET etc.
2. Council of Scientific and industrial Research (CSIR)
Council of Scientific and Industrial Research (CSIR), through its six constituent
laboratories, is playing a key role in strengthening India’s Chemical industry by supporting
R&D, technological upgradation, and process efficiency. It actively engages with start-ups
and MSMEs by offering technical support. CSIR has developed several import-reducing
technologies, including those for medical-grade oxygen, biodiesel, renewable bio-methane,
and eco-friendly processing systems. It is also undertaking research initiatives in the fields
of specialty chemicals, battery recycling, corrosion protection, and crop protection
technologies, while exploring AI-driven industrial solutions and carbon capture
technologies. CSIR also conducts regular workshops and outreach programs to connect
with industry stakeholders and address key challenges like climate change, energy security,
and supply chain disruptions.
3. Department of Biotechnology:
The Department of Biotechnology has introduced the BioE3 Policy (Biotechnology for
Economy, Environment & Employment) to promote high- performance bio-manufacturing.
As part of this initiative, the Department has called for Proposals to support R&D in
sustainable bio-manufacturing within the chemical sector. The call focuses on bio-
manufacturing of bio-based chemicals, biopolymers, and active pharmaceutical ingredients
(APIs) using production strains, and encourages participation from academia, start-ups,
industry, and collaborative partnerships between these stakeholders. Proposals have been
invited with the goal of advancing innovation and commercialization in the sector.
4. Ministry of MSME:
The Ministry of Micro, Small and Medium Enterprises (MSMEs) runs several
schemes and programs aimed at boosting research and development (R&D), integrating
MSMEs into global value chains, encouraging technological advancement, and enhancing
process efficiency, especially within the chemical sector.
As part of the MSME Champions Scheme, 3 key components are:
MSME Innovative (Incubation, Design &IPR) Scheme: Supports R&D and
innovation.
MSME Competitive (LEAN) Manufacturing Scheme: Promotes productivity and
quality improvements through lean practices (eliminating waste and maximizing
value).
MSME Sustainable (ZED) Zero Effect Zero Defect - Certification Scheme:
Encourages sustainable manufacturing and quality enhancement.
Additionally, the Ministry is implementing:
MSE Scheme for Promotion and Investment in Circular Economy (MSE- SPICE):
Supports initiatives aligned with the circular economy.
Micro and Small Enterprises – Growth Innovation and Technology (MSE-
GIFT) Scheme: Aims to drive technological upgrades and improve process
efficiency in MSMEs, including those operating in the chemical industry.
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