Chemicals and Fertiliser Minister D V Sadananda Gowda has said that foreign direct investment (FDI) inflow in Indian chemical sector is meagre at only 9 percent of the total inflow in the country despite conducive policy. Therefore, he asked the industry players to introspect the reasons for the same and also asked to suggest if measures or policy interventions are essential to boost growth of the sector which has the potential to reach to $304 billion by 2025 from the present $163 billion.
Gowda also assured the industry to address major hurdles being faced such as delay in getting green clearances and roll back of tax incentive for research and development (R&D). He noted that the government already has taken necessary measures to resolve the challenges and set up a Development Council and Advisory Forum for the chemical and petrochemical sector. He added that FDI up to 100%, under the automatic route is permitted for chemical industry.
Stating that the Indian chemical market size accounts for only 3% of the global chemical industry of $5 trillion, the minister said chemical industry could register double digit growth with the current initiatives of the industry as well as the government. He also said that the R&D spending needs to be enhanced from the present 2-3% to 5-8% of the revenue in line with overseas companies, and sustainable development should a prerequisite for long-term development of the sector. He also appealed that new technologies and techniques are mandatory for achieving 'zero defect' in quality and 'zero effect' on environment so that India can emerge as a major hub in this sector.