Chemical industry to gain from 'Make in India' initiative

India, with its skilled manpower and flourishing end-user industries, has the right ingredients to emerge as the global hub for chemical manufacturing provided the government undertakes tax & labour reforms and facility land availability for the industry. This was the message from the ‘India chemical industry outlook’ conference, organised by Indian Chemical Council (ICC) on March 3-4, 2015 in Mumbai.
 
At present, India is the net importer of chemicals as the availability to feedstock is a major challenge. Add to this woe is the inverted duty structure as a result of which raw materials (inputs) are taxed at higher rate than the end product. This discourages local manufacturing.
 
“India is highly import dependant for most of its chemical needs. However, it is placed at a point of inflection for rapid growth. India can explore many alternative feedstock options such as coal gasification, syngas, pet coke, etc. If right technologies are used, the challenge of feedstock can be solved, provided the government encourages investment in new technologies,” said Kishor Jhalaria, president – business planning & project development, Reliance Industries Ltd.
 
Finance minister has taken a few steps towards removing anomalies in the duty structures in this year’s budget. “The government is also aiming to improve business environment by adopting transparent policy changes and facilitating processes to solve some of the problems faced by the industry. ‘Make in India’ will play a pivotal role in driving some of the key initiatives to stimulate growth in the chemical industry. With GST planned to be rolled out in April 2016, the chemical industry will gain immensely,” said Gopal Sarma, partner, Bain & Company, which is working slowly with the Government of India on ‘Make in India’ campaign.
 
According to A J V Prasad, joint secretary, Department of Chemicals and Petrochemicals, the government is committed to its ‘Make in India’ initiative and chemical industry can play a major role in this campaign by making India a manufacturing hub for chemicals, especially knowledge and specialty chemicals. He also urged the industry to adopt eco-friendly technologies for sustainable development and to increase its spend on research and development.
 
Indian chemical manufacturers will have to understand and address issues around raw materials, infrastructure & environment, product portfolio, duty structures, human resources, etc to succeed in this market.