Technological advancement, innovation, R&D and investments keep India staying ahead of the game

India’s chemical sector has seen a steady rise over the years. Today, the country ranks 6th in the world in chemical sales and contributes 3 per cent to the global chemical industry. The Indian chemicals industry is highly diversified covering more than 80,000 commercial products. It is broadly classified into bulk chemicals, speciality chemicals, agrochemicals, petrochemicals, polymers, and fertilizers.

Several factors have contributed to the robust growth of the chemicals sector. Rapid consumerism, acceleration in manufacturing in India for both domestic as well as export markets is the key contributor to the development of the chemicals sector in recent years. Continued focus in promoting investments in the chemical industry, policy changes and growth of PCPIRs has also helped the growth of chemical and petrochemical industry. The per capita consumption of chemicals in India (excluding pharma) stands at $100 million; significantly lower than the global average of $500 million. Over the last 28 years, India has grown rapidly at an average of 7 per cent. The increase in per capita income, rising spending power, overall population and working population growth are some other factors. Along with this growing middle-class base, urbanization and industrialization are also the major drivers of the end-use sectors that are consuming chemicals in various forms.

Sanjay Gupta, Executive Vice President-Corporate Strategy, Deepak Fertilisers & Petrochemicals Corporation,  said, “Rising domestic and export demand in chemical end-use sectors such as agriculture, consumer and retail, food & beverages, infrastructure, building & construction, automotive, textile, electronics, pharmaceuticals, and healthcare are critical for chemical industry rise in India. For example, growing need for food due to population explosion into the growth of agrochemicals and fertilizers. Similarly, infrastructure and building & construction growth drives sectors such as paint & coatings, adhesives & sealants, construction chemicals, glass, aluminium, steel, plastics, etc.”

Over the years ease of doing business ranking has also been steadily improving for India. Except in the case of certain hazardous chemicals, 100 per cent FDI is allowed under the automatic route in the chemicals sector. The country’s attractiveness as a manufacturing destination has been rising due to competitive labour costs, its ability to build a plant at low cost as compared to developed countries. Also, recent changes to the corporate tax rates have shaped a more supportive ecosystem. The constant demand for cleaner, efficient and environment-friendly material has led to constant upgradation of products in the downstream industries. This has led to sustainable manufacturing in several end-user industries.

Another factor is India’s proximity to the Middle East, the world’s source of petrochemicals feedstock makes it suitable as a global manufacturing base. It also ensures the availability of basic feedstocks at competitive prices. India, as a country, is largely self-sufficient in naphtha, the feedstocks for petrochemical building blocks and bulk polymers. Not only this, but it is also a major producer of chlor-alkali chemicals.

This being said, given the current scenario where every sector is adapting to the latest technologies and automating and enhancing their current processes to ease out the workload. Innovation is critical for any industry and the same holds true for the chemicals industry as well. Innovation in this sector has resulted in new products that are increasing energy efficiency, enhancing environmental protection, and reducing dependency on oil-based products. As the chemical sector around the world becomes more challenging due to global development, the Indian chemical industry has started spending more on innovation and R&D, making it a core capability, which is acting as a key differentiator and key determinant of success.

Technology, Innovation, and R&D

It would be fair to say that Indian chemical sector, as a whole, needs to advance more as far as maturity cycle is considered in terms of technology and innovation. However, it should also be considered that it has come a long way in both aspects and established itself at the global stage.

Talking about the advancement in technology and innovation in the chemical sector, Chandrakant Nayak, CEO, DOW Chemical International (Dow India) said, “The Indian chemical industry is at a nascent stage for material and core R&D. The country is still buying core innovations in molecules, engineering and other allied technologies from developed countries. However, India is progressing at a rapid pace for application-based developments in intermediates and speciality chemicals. Last many years, India has made remarkable progress in developing the capability to design new and competitive processes to manufacture customized formulations and speciality molecules to serve the needs of global customers. A lot is expected to happen in sustainable chemistry and manufacturing over the coming years.”

Citing examples, Gupta explained that the chlor-alkali sector is matured and developed with most of the capacity based on the latest energy-efficient, environment-friendly membrane cell technology. Similarly, the petrochemical segment also has the latest technology in place to produce different building blocks such as ethylene, propylene, etc. Agrochemicals and fertilizer sectors have successfully developed unique solutions in insecticides, fungicides, herbicides, plant growth regulators and fertilizers. “Focus on innovation and R&D makes India a major exporter of agrochemicals to the outside world,” he added.

India has also adopted the best technologies and innovations in different other chemicals such as nitric acid, IPA, pyridine, ammonium nitrate, etc. to make agrochemicals, pharma intermediates, mining chemicals, explosives, etc. The country is now a manufacturing hub for the above chemicals and its intermediates.

Sectors like food processing industry, paints, and coatings, adhesives & sealants, food chemicals, construction chemicals, agrochemicals, pharmaceuticals, etc. have also adapted to the latest technology which has helped them to increase energy efficiency, enhance environmental protection, reduce water consumption, value for money solutions for customer, etc. One of the examples includes growing usage of water-based coatings in buildings, automotive and other areas. Similarly, the development of self-healing coating for corrosion protection, development of slow-release micronutrient, and innovation in the field of greenhouse firming are some other examples of innovation in this industry.

Many of the chemical plants are now running on the concept of Zero Liquid Discharge. The adoption of stricter pollution control norms and consumer safety norms in the automotive sector, power sector, etc. has also resulted in innovation in the chemicals industry. For instance, the gradual implementation of BS4 and BS6 norms in the Indian automotive industry led to the development of lighter, efficient, and yet stronger vehicles. This has resulted in many innovations and technology adoptions in the field of adhesives, rubber, coatings, polymers, steels, lubricants, etc.

Nayak said that in terms of R&D, Dow has been leading the path of sustainable chemistry for decades now. In recent times, our R & D efforts have been directed with special focus on climate protection, circular economy and safer materials. “Dow Polyurethanes (PU) division has recently launched a breakthrough innovation in the mattress recycling program, RENUVA. This program sets out to recycle polyurethane foam from end-of-life mattresses. As an example of circularity, the recovered product with recycled content – RENUVA Polyol can be used as a raw material for new mattresses or other applications such as building insulation boards. A unique feature of the RENUVA Program is its ability to bring the entire value chain together in a new business eco-system model with opportunity for partnerships of recycling companies, equipment and material manufacturers, brand owners and other value chain participants,” he added.

Listing down unique products in terms of R&D and innovation, Gupta said, “We have developed steel grade nitric acid, solar grade nitric acid, medical-grade uncoated prill ammonium nitrate, crop-specific fertilizers (WSF Grapes, WSF Tomato, WSF Sugarcane, WSF, pulses and WSF flowering), and bentonite Sulphur superfast. We are still in the process of making pure diisopropyl ether.”

Investments, a Necessity

Explaining the importance of investment in the sector, Nayak said, “As the market is growing, investing in upgrading technology is extremely critical to bring world-scale competitiveness as well as meet the sustainability needs by meeting all the environmental norms. While we focus on bringing new investments, there is also a need for upscaling or upgrading the existing facilities to be more competitive, cleaner and more productive.”

On the subject of investment, Gupta explained, “Regular investments are highly essential to feed the growing end sectors. In addition to regular investments, large investments are also critical, particularly in the field of petrochemicals and basic chemicals (both organic and inorganic) segments to ensure availability of feedstocks/raw materials at competitive prices to the downstream intermediate and speciality chemicals, pharmaceuticals, agrochemicals, etc. segments. This will ensure both supply sustainability and competitiveness at a global stage.”