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The size of the Indian Chemical industry is estimated
at US$ 28 billion (including Pharma and Fertilizers)
in FY00. The industry contributes 7% to GDP, 10% of
total exports of the country, 13% to total manufacturing
output and 15% to the total value added in manufacturing
sector.
In terms of volume, the Indian chemical
industry ranks 12th in the world, and has grown twice
as fast as the rest of the Asian chemical sector in
the last 5 years, and over 5 times the world growth
rate.
However, the industry is highly fragmented
with more than 6000 firms. Some of the major segments
within chemicals are Petrochemicals, Organic Chemicals,
Inorganic chemicals, Fine & Specialty chemicals,
Bulk Drugs, Agro chemicals, Paints and Dyes. Western
India accounts for almost half the chemical industry.
As we look ahead, some of the key issues
that need to be tackled are:
- Labour reform
- The need to build economies
of scale
- Investment in Research &
Development
- Poor infrastructure
- High cost structure
- Dependence on imported oil and
fuels
- Cheap imports thanks to falling
import tariffs and WTO
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