Published on May 24, 2014

The chemical industry is highly reliant on the economy, but the new government should take a few steps to help the Indian chemical industry develop further. Growth in this industry has been slow due to a number of factors and it’s crucial to address these issues.

The western parts of the country provide nearly 75 per cent of the national chemical output, especially states like Gujarat and Maharashtra. Both these states have even reached the limits prescribed in terms of land and other facilities available for the chemical industry. For instance, firms can no longer set up new projects and expansions in certain parts of Gujarat, according to the directions of the Ministry of Environment and Forests, as they are categorized as ecologically damaged zones.

It’s vital to think of some alternate sites like the coastal areas. Companies should be encouraged to set up production units in Mangalore, Ennore, Paradeep, Vishakhapatnam and Haldia. These areas are supposed to be home to PCPIRs, however lack of interest amongst investors has delayed these projects. The new government should make efforts to attract investors.

All industries in India are plagued by lack of infrastructural facilities. The Indian chemical industry is also struggling due to the pathetic state of infrastructure and obsolete technologies. Improvement plans require efficient management and participation of industry representatives.

There is a need for setting up a modernization fund which can help improve the quality of assets efficiently and effectively. Such a fund would help improve the industry’s competitiveness.

India needs to implement a system where in the complaint are rewarded and others are penalized. Currently, the regulatory system no differentiation between facilities that are complaint to environmental laws and ones that are not. Gujarat for example, offers extended approval to operate for units that are ISO-14000 compliant. But the need of the hour is to implement such steps in every state. Compliant units suffer because of delayed approvals, which is a major hindrance.

India needs to improve the standards for quality, performance and safety and ensure that they are strictly implemented. Improved standard will increase demand for products like construction chemicals, flame retardants, fuel additives, coatings etc.

The industry is constantly under criticism for several reasons. But this should stop as it discourages youngsters from joining the industry and limits the industry’s growth prospects. The industry should focus on addressing issues impacting them with the help of the government.

The industry and the government should work toward promoting India as a safe place to do the chemical business. SMEs should be encouraged to participate in local and international trade fairs in order to improve exports. 

The Indian chemical industry should prepare a national inventory of chemicals. Regulation of chemicals is crucial and we need to have a comprehensive picture to push growth in the right direction.