"Strong domestic demand, coupled with huge investments by domestic and foreign players, is making the industry scale new heights," Gowda said.
The minister said rising disposable income, median age of population, urbanization and growing penetration, and demand from rural markets are the factors contributing to growth of chemical and petrochemical sector.
"As production and consumption shift towards Asian and Southeast Asian countries, the demand for chemicals and petrochemicals is expected to grow at 9 per cent per annum, much faster than the expected GDP growth rate, to reach USD 300 billion by 2025," Gowda said.
Gowda said the size of the industry was USD 163 billion in 2018, contributing 13.4 per cent of manufacturing GVA (gross value added) and 2.4 per cent of national GVA. The sector employs 2 million people.
He said Indian chemical and petrochemical industry plays an important role in all sectors of the economy.
Stating that successive governments have taken various initiatives to promote this sector, the minister highlighted that licensing requirements, except for hazardous chemicals and a few special drugs, have been removed.
Entrepreneurs are allowed to set up chemical industries following the Industrial Entrepreneurs' Memorandum (IEM) route and under the automatic route, 100 per cent FDI is allowed for all chemicals, except hazardous ones, he said.
Gowda said the peak rate of customs duty on most chemicals has been brought down to 7.5 per cent, while the Petroleum Chemical Petrochemical Investment Regions (PCPIR) policy has been introduced to boost the development of chemicals and petrochemicals investment regions.
"I certainly believe that the Indian chemical and petrochemical sector holds a potential to emerge as global manufacturing hub. We are aware of the need to support the cluster based development of the sector through provision of world class infrastructure and logistics. The department is working on it," he said.
Assocham National President Niranjan Hiranandani spoke about the importance of the sector in Indian economy.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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