The Indian specialty chemicals market has been forecast to increase by 13-14% over the next five years, hitting a market value of $50 billion by the end of 2018.
The chemical sector registers around one-eighth of India's industrial production and one-sixth of the country's exports of manufactured goods.
Specialty chemicals can be defined as a "group of relatively high value, low volume chemicals known for their end use applications and/ or performance enhancing properties".
The industry is set to be driven by strong growth in end use industries, and the increased adoption of specialty chemicals and their increased usage across different products categories.
Furthermore, continued high growth in domestic demand that is likely to be sustained, along with investment in R&D and manufacturing augurs well for India which is emerging as a global specialty chemicals hub.
Key consumer industries e.g. textiles, automotive, construction, etc. are expected to grow at rates higher than the overall GDP, while emerging customer needs across consumer industries call for products with higher quality/ increased performance products e.g. wrinkle free textiles, reflective glass, cement admixtures, etc.
Specialty chemicals business is referred to as a 'knowledge-based' one that caters to different applications that make the business more complex. Manufacturers can create a niche for products having higher and more stable margins.
The Indian specialty chemical industry is in a sweet and positive situation. It is characterised by substantially lower penetration against a user base that sees increasing globalisation and higher disposable income.
India is establishing itself as a major hub for manufacturing and R&D. The erstwhile cost advantage of China with respect to India in manufacturing is becoming insignificant. Besides providing access to a rich pool of knowledge workers, India provides a robust legal and regulatory framework for research based development.
India became a signatory to TRIPS in 1995. A lot of companies are getting their products patented in India. All these factors have contributed to India evolving into an attractive investment destination.
For more information on the Indian specialty chemicals market, see the latest research: Indian Specialty Chemicals Market
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