CHEMICALS AND PETROCHEMICALS
INDIA LANDSCAPE
National Strategic Priority
- India is the 6th largest producer of chemicals in the world and ranks 11th in the world exports of chemicals (excluding pharmaceutical products)
- India accounts for 2.5% of the world's global chemical sales, exporting to more than 175 countries
- India is the world leader in dye manufacturing, accounting for 16%-18% of global dyestuff exports
- India is the third largest polymer consumer in the world and is expected to consume 60 mn tonnes by 2040
- India manufactures about 80,000 varieties of chemical products and 4th largest producer of agrochemical in the world
- The sector significantly contributes to the employment opportunities in India - employment to over 2 million people
Sector Performance at the National Level
- The market size of chemicals and petrochemicals sector in India is around USD 220 bn in 2023
- The sector is expected to grow at 9.3% to reach USD 304 bn by 2025
- Demand for chemicals and petrochemicals in India is expected to nearly triple and reach USD 1 trillion by 2040
- FDI inflows in the chemicals sector (other than fertilizers) reached USD 22 bn between April 2000-March 2024
- An investment of USD 107 bn is estimated in the Indian chemicals and petrochemicals sector by 2025
Rajasthan Landscape
Sector Performance:
- Rajasthan is the largest onshore producer of crude oil and second largest producer of natural gas in India
- Exports of chemicals and allied products were USD 897 mn in FY 2021-22 from the state.
Rajasthan: Value Proposition for Chemicals and Petrochemicals Investors
- 100% FDI is allowed under the automatic route in the chemicals sector (except in the case of certain hazardous chemicals)
- Largest onshore producer of crude oil: the state, particularly the Barmer region, is a significant contributor to India's crude oil production.
- Second largest producer of natural gas with substantial reserves and ongoing extraction activities.
- Rajasthan is the largest onshore producer of crude oil and the 2nd largest producer of natural gas in India. Further, HPCL Rajasthan Refinery Limited is setting up a greenfield refinery cum Petrochemical Complex with a capacity of 9 MMTP per annum in Pachpadra tehsil of Balotra district which provides immense potential for feedstock availability.
- The upcoming refinery and petrochemical complex in Barmer will produce key petrochemical products like polypropylene, LLDPE/HDPE, butadiene, benzene, and toluene.
- Rajasthan is committed to the development of the chemicals & petrochemicals sector through infrastructure support. Rajasthan State Industrial Development and Investment Corporation Limited (RIICO) which is developing Rajasthan Petro Zone (RPZ) in the vicinity of the upcoming HPCL Refinery & Petrochemical Complex (RPC) to take advantage of the downstream inclusion from the RPC
- 55 MLD water allocated for Rajasthan Petro Zone
- Rajasthan provides access to around 40% of India's market in the neighboring states and serves as an indispensable medium of transport between North-Indian states and the ports on the Western coastline of India
- Rajasthan has the 3rd largest network of national highways with 20 major national highways, 2nd largest rail network in India, providing easy access to major ports such as Mundra Port and JNPT, nine inland container depots, one air cargo complex as well as seven airports with direct international and national connectivity.
- Further, over 58% of state's area within Delhi Mumbai Industrial Corridor (DMIC).
- Further, the RPZ will have access to major ports - Kandla, Mundra, JNPT and numerous other ports along west coast, and is located in proximity to Jodhpur Airport (100 km from HRRL)
- All strategic locations in the state are well connected to domestic and export markets through all modes
- Rajasthan is actively developing its skilled workforce in the chemical and petrochemical sectors through targeted initiatives and strategic collaborations, focusing on key areas such as process automation, safety management, and advanced chemical engineering techniques
- Highly skilled young talent emerging from institutes such as Central Institute of Petrochemicals Engineering and Technology (CIPET) Jaipur offering various programs in petrochemical engineering, plastic technology, and related fields.
Policies & Incentives
Rajasthan Investment Promotion Scheme (RIPS) 2022
Asset Creation Incentives (ACI)
- Capital subsidy up to 28% over 10 years, OR
- Turnover linked incentives (TLI) up to 2% for 10 years, OR
- Investment subsidy (net SGST reimbursement) up to 75% for 7 years
Exemptions
- 100% exemption on electricity duty for 7 years
- 100% stamp duty and conversion charge exemption
- 100% exemption in land tax
Special incentives
- Employment booster up to 15% on chosen ACI
- Additional incentives: green incentives, freight subsidy, cluster incentives, training and skilling incentive
Additional incentives
(For manufacturing thrust sectors)
- 10% thrust booster on top of ACI chosen, OR
- 5% interest subsidy for 5 years, OR
- 20% anchor booster on top of ACI chosen to first 3 units in a region / sector
- 100% banking, wheeling, and transmission charges waived off / reimbursed for captive power plants set up by anchor enterprises
- Policy allows phasing of investment without loss in benefits
Customized Packages
Additional flexibility for investors to design own ACI mix through customized packages for investment over INR 500 crore. In case of investments greater than INR 1000 Cr. and greater than 800 employment generation, the State reserves the right to grant customization on a higher NPV of the Asset Creation Incentive up to up to 20% of the NPV of the chosen Asset Creation Incentive as part of the manufacturing/ services standard package on a case-to-case basis.
Rajasthan Micro, Small and Medium Enterprises (Facilitation of Establishment and Operation) Act, 2019
- Exemption from Approvals: MSMEs are exempt from obtaining certain approvals and inspections required under various state laws for 5 years.
Ease of Doing Business
- RajNivesh portal provides a single point, online interface and a time-bound clearance system by acting as a one-stop information for approval / tracking center for clearances & approvals
- The platform integrates over 120+ services across 14 departments, emphasizing the state's commitment to the implementation of investor-friendly policies that enhance ease of doing business and promote sustainable development policies that enhance ease of doing business and promote sustainable development.
Opportunities
Potential opportunity for downstream players and other industries to set up units in the Petro Zone taking advantage provided by the zone and feedstock available from Refinery cum Petrochemical complex
Petrochemical Complexes
Establish integrated petrochemical complexes to produce basic chemicals like ethylene, propylene, and aromatics in industrial hubs like Kota and Jaipur can be considered due to infrastructure and connectivity.
Specialty Chemicals
Invest in the production of high-value specialty chemicals used in pharmaceuticals, agrochemicals, and personal care products.
Fertilizers
Set up plants for manufacturing nitrogenous, phosphatic, and potassic fertilizers leveraging local raw materials like rock phosphate in Udaipur and surrounding areas with access to rock phosphate mines.
Plastic and Polymer Manufacturing
Develop facilities for manufacturing plastics, resins, and polymers, catering to automotive, packaging, and electronics industries.
Textile Chemicals
Invest in the production of dyes, pigments, and other chemicals used in the textile industry, leveraging Rajasthan's strong textile sector.
Industrial Chemicals
Establish units for producing industrial chemicals like sulfuric acid, caustic soda, and chlorine which are used in metal processing, water treatment, and paper manufacturing.
Green Chemicals
Invest in the production of bio-based chemicals and green chemistry solutions.
Paints and Coatings
Set up manufacturing units for paints, coatings, and adhesives.
Feedstock
Feedback stock such as LLDPE & HDPE, Butadiene, Benzene, etc.
Major Players in Rajasthan
