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Indian Chemical Trend

The global chemical industry is going through a shift. Over time the major chemical manufacturing hubs have shifted from US to Europe to China.

While India's share has remained constant. Lack of infrastructure and R&d are the major reasons for India's under-performance despite huge potential and advantages over other countries.

But, that is changing. Chinese chemical manufacturing industry has been saturating for a while now. Rising labor costs, high environmental pollution and Chinese govt's clampdown on polluting industries recently has presented India with great opportunities.

India seems to have significant cost advantage over China. But what India lacks is infrastructure and economies of scale like China.

Govt support and encouragement in R&d and expansion of Indian chemical industry is vital for India. The country's rising R&d spending coupled with government's incentives like CSR relaxations ( Now, firms can utilize their CSR funds for R&d) & corporate tax cuts are poised to improve situations significantly.

India also has a healthy domestic growth of major end use industries.

All the factors above stack up in India's favour. Indian government has the role to play as a protector and nurturer of the Indian chemical industry. With good R&d and infrastructural developments, India has all it takes to become the next hub of the global chemical manufacturing space.


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