CHEMICALS AND PETROCHEMICALS

India Landscape
Rajasthan Landscape
Policies & Incentives
EODB
Opportunities

INDIA LANDSCAPE

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.
FDI inflows in the chemicals sector (other than fertilizers) reached USD 22 bn between April 2000-March 2024.
Indian chemical industry is expected to grow at 9.3% to reach USD 304 bn by 2025.
The market size of chemicals and petrochemicals sector in India is around USD 220 bn in 2023.
India accounts for about 16% of world production of dyestuff and dye intermediates.
In India, the chemical and petrochemical industry employs over 2 million people and manufactures more than 80,000 varieties of chemicals and petrochemicals.
Demand for chemicals and petrochemicals in India is expected to nearly triple and reach USD 1 trillion by 2040.

Rajasthan Landscape

Sector Performance:

Exports of chemicals and allied products were USD 550.44 Mn in FY 2024 from the State.
In FY 2024, 4.4 Mn MT of crude oil and 1522.41 MMSC of natural gas was produced which brought in a total revenue of USD 411.01 Bn.
Rajasthan has significant resource potential of hydrocarbons under four potential Proliferous Basins covering districts of Jaisalmer, Barmer, Bikaner etc. The State has immense investment opportunities in Upstream, Midstream & Downstream hydrocarbon sector.

Rajasthan: Value Proposition for Chemicals and Petrochemicals Sector

Largest onshore producer of crude oil: the state, particularly the Barmer region, is a significant contributor to India's crude oil production.
2^nd largest producer of natural gas with substantial reserves and ongoing extraction activities.

The Government of Rajasthan (GoR) and Hindustan Petroleum Corporation Limited (HPCL) are establishing a 9 MMTPA “Petroleum Refinery cum Petrochemical Complex” (RPC) in Pachpadra Tehsil of Balotra district under a joint venture company named HPCL Rajasthan Refinery Limited (HRRL).
This refinery will connect with Jamnagar Refinery and Bathinda Refinery through Amritsar Jamnagar Expressway.
An industrial area in form of Rajasthan Petro Zone (RPZ) is being developed in the vicinity of the upcoming HPCL Refinery & Petrochemical Complex (RPC) to take advantage of the downstream industries from the RPC.
The upcoming refinery and petrochemical complex in Barmer will produce key petrochemical products like polypropylene, LLDE/HDPE, butadiene, benzene, and toluene.
55 MLD water available 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 India.
Rajasthan has the 3rd largest network of national highways with 20 major national highways, 5th 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.
Over 58% of state's area lies 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)
The state has 415+ well developed industrial areas with 51,500 acres of industrial land available (No. 4 in India)

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.
Central Institute of Petrochemicals Engineering and Technology (CIPET) Jaipur is offering various specialized programs in petrochemical engineering, plastic technology, and related fields.
Universities: There is total 88 universities, out of which 53 private universities and 28 State universities, and 7 other universities.
Nationally and Internationally Renowned Institutions: The State is home to numerous technical institutes, including prestigious ones like the Indian Institute of Technology (IIT) Jodhpur, Indian Institute of Management, Udaipur, Indian Institute of Information Technology (IIT) - Kota, National Institute of Logistics and Material Management, Udaipur, National Law University, Jodhpur, All India Institute of Medical Sciences, Jodhpur, FDDI - Jodhpur, The Birla Institute of Technology & Science, Pilani etc.
Availability of Manpower: Pool of a large young, trained workforce with 62% of Indian population in the working age group of 15 to 59 years.
Highly skilled young talent emerging from institutes such as NIFT Jodhpur, Indian Institute of Crafts & Design (IICD) - Jaipur, Indian Institute of Handloom Technology (IIHT), Jodhpur.

Policies & Incentives

Rajasthan Investment Promotion Scheme (RIPS) 2024

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Asset Creation Incentives (ACI)

Investment Subsidy (SGST Reimbursement) -75% of the State tax due and deposited for a period of 7 years OR
Capital Subsidy -13-28% of EFCI* to be disbursed in annual instalments over 10 years OR
Turnover Linked Incentive -1.20% - 2.0% of Net Sales Turnover to be disbursed annually for 10 years.

Special Incentives

Employment Booster -10% - 15% booster on chosen Asset Creation Incentive
Training & Skilling Incentive - Skilling support in form of a Training Subsidy of Rs. 4000 per worker per month for 6 months for training delivered in Rajasthan.

Exemptions

100% stamp duty
100% conversion charges
100% electricity duty exemption for 7 years

Additional Incentives

Thrust Sector Booster - 10% Thrust Booster on top of ACI chosen OR
5% Interest Subsidy for period of 5 years OR
Anchor Booster - 20 % Anchor booster on top of ACI chosen.

Customized Packages

Investment of more than Rs. 500 cr - Option to redistribute benefits among ACI (Capital, TLI and SGST reimbursement)
Investment of more than Rs. 1000 cr and employment of more than 800 persons - Customization on a higher NPV of the Asset Creation Incentive upto 20% of the NPV of the chosen ACI.

Other Unique Features

The State will also allow telescoping and upgrade the earlier set of incentives paid on a lower slab basis the total incentives applicable once the full investment is completed.
Group/cluster of enterprises within the same or nearby premises (within 50 km radius) with a consolidated investment proposal shall be eligible for cluster incentives.

Rajasthan Micro, Small and Medium Enterprises (Facilitation of Establishment and Operation) Act, 2019

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For the execution of this Act, the Government of Rajasthan launched a web portal "https://rajudyogmitra.rajasthan.gov.in" on 12th June 2019 for filing applications.
Issuance of 'Acknowledgement Certificate' up on submission of 'Declaration of Intent' electronically or physically to the nodal agency.
On basis of said certificate an MSME unit is exempted from approvals and inspections under all State laws for 5 years from the date of issuance of the Acknowledgement Certificate

Ease of Doing Business

RajNivesh portal provides a single point, online interface and a time-bound clearance mechanism by acting as a one-stop information / registration / approval / tracking centre for clearances / approvals
The platform integrates 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
Officials from 14 concerned Departments of State government have been deputed to Bureau of Investment Promotion, Rajasthan for facilitation of investment proposals.

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.