India: global hub of specially chemicals

By: Admin
Oct 03 2017

India: global hub of specially chemicals

Global specialty chemical manufacturers find Asian countries, especially India, an attractive destination for establishing their regional bases. This helps them access the growing markets in these regions with products and services suited to the needs of the local customers. These countries also offer a low cost advantage. While China had been a preferred destination so far, we are likely to see a change to this in the future with India making a mark as a reliable and cost effective supplier.
Smaller Indian companies are finding favour with MNCs as providers for their specialty chemical requirements. Key factors favouring this trend include quality of product, timely delivery, costs, safety, and health and Indian companies are now able to match up to these factors. For the Indian companies this trend provides steady revenue stream if they become the most preferred partners, for MNCs for their specialty chemical requirements.


India is finding favour as a major hub for manufacturing and R&D. This is partly because the cost advantage that China had vis-à-vis India in manufacturing is becoming insignificant. India has a strong legal and regulatory framework for research based development and a richly talented, English speaking pool of knowledge workers. With India becoming a signatory to TRIPS in 1995, many companies are getting their products patented in India.
While multinationals are increasing their sourcing from India, Indian companies are ramping up to the opportunity by creating new capacity, increasing productivity and expanding into Western markets.
Worldwide market for specialty chemicals is projected to touch US$1.2 trillion by 2022 from an estimated US$970 billion in 2017.
China and India, in particular, have emerged as major chemical hubs and currently are home to some of the biggest names in Specialty Chemicals. On the other hand, China has moved away from being a low-cost producer focused primarily on exports to cater to the fast growing market for high-value and high-quality downstream products. Increase in competition and commoditization of mature products imply that there is no option other than innovation to survive in the industry.

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Adhesives & Sealants, Agrochemicals, Coatings and Engineering Thermoplastics constitute the largest segments in the global market for Specialty Chemicals, together cornering an estimated share of nearly 50% in 2016. In terms of growth, however, the most promising segments include Electronic Chemicals, Nutraceutical Ingredients and Construction Chemicals, among others.
To make India a global manufacturing hub, the government will have to create conducive environment for a thriving eco-system wherein suppliers to product manufacturers can also flourish. One of the key components of this ecosystem is chemicals, which go into every product that one can imagine. In fact, development of any economy or country is directly linked to the per capita consumption of chemicals.
Specialty chemicals and pharmaceutical intermediates such as HMDS, CMIC, HMDSO and TMCS have captured a significant share in the Indian market due to their immense demand in this part of the world. These chemicals are sold mainly on the basis of their function or performance. These chemicals can be complex formulations or single entities depending upon the client’s requirement. The emergence of several new specialty chemical manufacturers in the country has made India a global manufacturing powerhouse.

The major reason behind the increasing popularity of specialty chemicals industry is the fact that these intermediates are ken enablers for other prominent industries. These chemicals are used in popular industries like cosmetics, pharmaceuticals and oilfield. With huge technical man-power and suitable demography, India has been a hub for manufacturing these specialty chemicals.


Depletion of natural resources rapidly due to the increased population in India is the major cause behind the huge demand for specialty chemicals that aid in the manufacturing of several important medications. Specialty chemicals and pharmaceutical intermediates have a small life cycle, which is why the companies in India have now started investing significantly in R&D so that the consumer requirements can be met at all times. It is due to this disciplinary approach that the Pharmaceutical Intermediates Manufacturers in India have been able to contribute heavily towards making the country a global manufacturing powerhouse.

Most popular types of pharma intermediates in India
Hexamethyl Disilazane
HMDS or Hexamethyl Disilazane is a popular organ silicon compound which is a precursor, reagent to various basis that are used in organ metallic chemistry and organic synthesis. This colorless liquid is basically handled through comprehensive air-free techniques. HMDS is insoluble in water.
Chloromethyl Isopropyl Carbonate (CMIC)
CMIC or Chloromethyl Isopropyl Carbonate is another popular pharmaceutical intermediate which is used in manufacturing a medication named as tenofovir. This transparent and colorless liquid is helpful in creating tenofovir which in turn is a medication for treating AIDS and hepatitis B. It also acts as an intermediate in the process of organic synthesis.
Trimethyl Chlorosilane
Trimethyl Chlorosilane is a popular organo silicon compound which is insoluble in water. It is also known as chlorotrimethylsilane. This colorless liquid is used widely in the field of organic chemistry. The boiling range of this liquid is between 55 to 59 degree Celsius.
Hexamethyl Disiloxane
HMDSO is a clear and colorless liquid which is a popular organ silicon compound. This volatile liquid is also used as a reagent and solvent by many in the process of organic synthesis. The boiling range of this intermediate is between 101 to 104 degree Celsius.
These are some of the common pharma intermediate products which are manufactured in India on a large scale basis.


Gujarat is known to be at the forefront of India’s chemical industry as a major manufacturing hub and as the country’s ‘Petro Capital’.
It was evident in the India Chem exhibition and conference in October 2015. Investors and speciality chemicals companies sought to forge meaningful business collaborations with each other at the meet. The focus was on speciality and fine chemicals, agrochemicals, dyes and colorants and chemical technology.
The Indian chemical market is expected to grow at about 9%/year, with the potential to reach $214 billion by 2019. This growth will be spurred by rising demand in end-user segments and by expanding exports fuelled by increasing export competitiveness.
Such success will, however, depend on how key challenges to growth, such as India’s high dependence on imports, low installed capacities, limited focus on technology upgrades and the availability of vocationally trained manpower, are met. Gujarat contributes to 15% of the country's chemical exports to US, Europe and other developed nations - a clear sign of global competitiveness.
Challenges to growth of the speciality chemical industry are many.  Availability of feedstock is a major issue, because there is limited availability of base chemicals, which makes it difficult for multinationals to set up businesses in India. Land and integrated infrastructure are also cited as bottleneck to industry growth.
Gujarat state is home to about half of India’s chemical industry
To position Gujarat strategically on the global map, there should be a collaboration to mimic what is being done in Singapore to develop a blueprint across the industry and this has to be strictly implemented.
As four of the largest chemical clusters in Gujarat are working at less than 50% of the capacity, it is imperative to sort out the basics, such as unshackling of existing capacities.
But with the regulatory challenges and bureaucracy in place, can the state become a global manufacturing hub of speciality chemicals?


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