FDI Inflows to Chemicals

FDI Inflows to Chemicals industry in India has increased over the last few years due to the several incentives that have been provided by the government of India. The increased FDI Inflows to Chemicals industry in India has helped in the growth and development of the sector. 100% FDI is allowed in chemicals under the automatic route in India.

Foreign direct investment in India:

The Indian government made several reforms in the economic policy of the country in the early 1990s, which helped in opening the country's markets to foreign direct investment. The government of India, in order to increase the flow of FDI in the country, simplified the procedures for FDI in the country. FDI in India comes through non- resident Indians, international companies, and other foreign investors.

Chemicals industry in India:

The chemicals industry in India was worth more than US$ 40 billion in 2004- 2005. The industry of chemicals in India is an important part of the economy of the country, for it constitutes around 6% of the country's GDP. The total amount of exports from the chemicals industry in India stood at US$ 12 billion in 2004- 2005. The chemicals industry in India produces over 70,000 varieties of products.

FDI policy in chemicals industry in India:

• Up to 100% Foreign Direct Investment (FDI) is allowed through the automatic route for all the items in the chemical industry except for the chemicals that are of hazardous nature for which the approval of the government is required.


• The government plans to establish chemical parks in SEZs in order to provide world class infrastructure, increase clustering, and also ensure concessions in tax.

Amount of FDI inflows to chemicals industry in India:

FDI Inflows to Chemicals industry in India has registered significant growth in the last few years. The total amount of FDI Inflows to Chemicals industry in India stood at US$ 1,316 million between 1991 and 2002.

International companies having operations in chemicals industry in India are:

• Dow Chemical
• BASF
• Du Pont
• Bayer

FDI inflows to chemicals industry in India has given boost to the industry:

The increased flow of foreign direct investment in the chemicals industry in India has helped in the development, expansion, and growth of the industry. This in its turn, has led to the improvement of the quality of the products from the industry.

Last Updated on 4/23/2011