1. An overview of Indian
Chemical Industry
Royal Society of Chemistry

2. INDIAN ECONOMY
 India’s GDP – US $ 1.53 trillion
 10th largest in terms of market exchange rate
 In terms of purchasing power parity (PPP)
 4th Largest
 US $ 4.06 trillion
 Agriculture – 16.1% of GDP
 Industry – 28.6% of GDP
 Service sector – 55.3% of GDP
 2010 per capita income
 US $ 1,265 in terms of market exchange rate
 US $ 3,339 in terms of PPP
 GDP growth 8.8% during 2003 – 08
 GDP growth 8.5% (2010-11)
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3. SIZE OF INDIAN CHEMICAL INDUSTRY
 12th largest in terms of volume
 3rd largest in Asia
 Industry size - US $ 76 billion in 2009-2010
 5% of india’s GDP
 Expected to grow at 10% - double the growth rate of the global
industry
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4. CHEMICAL CLUSTERS ARE CONCENTRATED
IN THE WEST
Chemical clusters in India
Baddi
States Share of Dera
production Bassi Panipat
Gujarat 53%
NCR
Maharashtra 9% Vadodara
Ahmedabad
Madhya 5%
Pradesh Jamnagar, Nagda
Uttar Pradesh 6%
Bharuch, Hazira, Vapi Haldia
Tamil Nadu 6%
Punjab 4% Thane, Pune , Chiplun
Hyderabad
Others 17% Vishakhapatnam,
Kakinada
Source: Working Group of Chemicals, Planning Mangalore
Commission (11th Five Year Plan) Bangalore Chennai
Cuddalore, Pondicherry
Cochin
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5. CHARACTERISTICS OF INDIAN CHEMICAL
INDUSTRY
 High domestic demand potential, as the Indian markets develop
and per capita consumption levels increase;
 High degree of fragmentation and small scale of operations;
 Limited emphasis on exports due to domestic market focus and
smaller scale of operations;
 Low cost competitiveness as compared to other countries due to
high cost of feedstock & power, taxation structure and cost of
capital;
 Low focus on R&D despite initiatives to innovate processes to
synthesize products cost effectively
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6. TRANSFORMING INDIAN CHEMICAL INDUSTRY
 Large petrochemical capacities
 Trend towards outsourcing of different chemical intermediates to
India
 Domestic companies moving up the value chain
 Stringent environmental laws and practices leading to shifting of
plants to India
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7. SEGMENTS OF INDIAN CHEMICAL
INDUSTRY
Knowledge
30.69%
Basic
47.84%
Speciality Basic
21.47% Speciality
Knowledge
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8. THE INDIAN CHEMICAL INDUSTRY - THREE
KEY SEGMENTS
Segment Share of Market Market segments
market growth
Organic Chemicals Inorganic Chemicals
Petrochemicals – Basic Fertilizers
(Ethylene, Propylene etc)
Petrochemicals – Polymers Chlor Alkali
Basic 48% 8.82%
Other organic chemicals – Other inorganic
Benzene based, alcohol chemicals
based, others
Paints and varnishes
Dyes and Intermediates
Specialty 21% 10.00%
Textile Chemicals
Others
Pharmaceuticals
Knowledge 31% 11.60% Biotechnology
Agrochemicals
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9. TOP TEN BASIC CHEMICAL COMPANIES
SL no Top ten companies Revenue
(US $ billion )
1 Reliance Industries 52.79
2 IFFCO 3.58
3 Tata Chemicals 1.32
4 National Fertilizers Ltd. 1.23
5 RCF 1.17
6 JBF Industries 0.76
7 Indo Rama Synthetics 0.59
8 Finolex Industries 0.42
9 Aarti Industries 0.31
10 Guj Alkalies & Chemicals 0.30
Source : Annual Report of respective Companies.
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10. FERTILIZER INDUSTRY SNAPSHOT
Investment US $ 5.53 bn
Number of plants Total 128 of which
Urea – 31 (28 operational)
Complex fertilizers – 19 (including 11
dap plants)
SSP – 66
Others (amm. Sulphate etc) -12
Capacity (2009-10) N – 12.05 million tonnes
P – 5.63 million tonnes
Production of fertilizer nutrients N – 11.90 million tonnes
(2009-10) P – 4.32 million tonnes
K – imported
 Stagnation in indigenous capacity, production
 Steep rise in costs of imported raw materials and intermediates
Source for Tonnage : Annual Report 2009-10, Department of Fertilizers, Government of India
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11. INDIAN SPECIALITY CHEMICALS : OVERVIEW
At an estimated $16.25 Bn India’s Specialty Chemicals Market represented
roughly 4% of the Global Market in 2008
Source : Tata Strategic Management Group, ISP Estimates
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12. PHARMACEUTICAL INDUSTRY IN INDIA
 Size of pharmaceutical industry in India.
US $ bn
Domestic 12.94
Exports 8.79
Total 21.73
 Projected growth - 11.6% per annum
 US $ 20 billion domestic market by 2015
 US $ 30 bilion domestic market by 2020
 Acute therapy
 Value contribution – 71%
 Growth - 16.3%
 Chronic therapy - 18.7% growth
Source : Dept of Pharmaceuticals, Govt. of India
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13. Pharma in India: Key Strengths
 High GDP growth rates, rising population numbers and, as a result, a
growing middle class are the drivers of India's pharmaceutical
market.
 Strong and well developed chemistry R&D and manufacturing
infrastructure
 Majority of the Indian firms comply with cGMP standards and India
has the largest number of US FDA approved manufacturing sites
(about 80) outside the US.
 India’s cost arbitrage: Manufacturing costs are 30-40% lower, labour
costs are 1/7th of US, production costs are 40-50% lower while R&D
costs are 20-30% lower when compared to other developed nations
 Over USD 50 bn and 2 bn Euro worth of patented drugs will go off
patent in US and Europe by the end of year 2010, which would
encourage more outsourcing activity to India.
 Offer value added services including data management, biostatistics
etc.
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14. Pharma in India: Weaknesses
 Price regulation: The NPPA (National Pharma Pricing Authority),
decides the various pricing parameters and sets prices of different
drugs, which leads to lower profitability for the companies.
 Continuous rise in R&D expenditure (from 2% to nearly 8-10%)
increases pressure on the industry to enhance productivity
 Shortfall of over 800 trained professionals per annum for the pharma
industry owing to the burgeoning growth of the sector and the
increasing focus on R&D.
 India is not yet a part of the eco system of academic research, VC
community, key opinion leaders
 Inadequate strength in early discovery
 Low risk appetite – VC & PE funding availability
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15. LEADING INDIAN COMPANIES IN
KNOWLEDGE CHEMICALS SECTOR- 2010-11
Sl No Top ten companies Revenue
(US $ Bn)
1 Cipla 1.31
2 Ranbaxy Laboratories 1.20
3 Dr. Reddy's Laboratories 1.10
4 Lupin Labs 0.95
5 Aurobindo Pharma 0.88
6 United Phosphorus 0.65
7 Cadila Healthcare 0.46
8 Bayer CropScience 0.46
9 Glaxo Smithkline 0.45
10 Sun Pharmaceuticals 0.41
Source : Annual Report of respective Companies.
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16. Top Pharmaceutical companies in India
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17. INDIAN AGROCHEMICALS INDUSTRY
 Domestic market : > US $ 1 billion
 Exports :> US$ 0.5 billion
 Market share of multinationals : 50% +
 The balance is shared between
 Basic manufacturing company
 Formulators / repackers / marketing companies
Source : The Third India Chemical Industry Outlook
Conference
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18. India and the future
• By 2050- 61% of Indian population in working
group (15-59 yrs)= 900 m
• 18 % of world’s working age population
• 1 in 6 persons of global workforce will be an
Indian
• India could have the second largest economy in
the world (larger than the US) of $36 trillion, and
a per capita income of about $22,000 by 2039
Mashelkar, 2010

19. Acknowledgments/Sources:
• Indian Chemical Council
• UK Trade & Investment
• Science & Innovation Network
• British High Commission, India