Specialty Chemicals Market in India 2022-2027
Globally, the specialty chemicals market has grown to become one of the most important chemical segments. Large businesses with diverse portfolios and smart, contemporary management approaches dominate the specialty chemicals industry. Advanced ceramic materials, construction chemicals, cosmetic chemicals, water management chemicals, oil field chemicals, textile chemicals, and food additives are products which dominate the market. Rubber processing chemicals and specialized paper chemicals are also some of the by-products of specialty chemicals production process.
In FY 2021, the market in India was valued at INR 3,474.68 Bn. It is expected to reach INR 8,140.83 Bn by FY 2027, expanding at a CAGR of ~15.45% during the FY 2022 ─ FY 2027 forecast period. Scale of operations is a key differentiator across categories such as agrochemicals, adhesives, and elastomers because it promotes in achieving a major portion of revenue from customers while generating economies in large scale. The market is characterized by the presence of a substantial unorganized sector. It is assumed to be bigger than the organized sector in some sub-segments, such as basic ingredients, but is difficult to measure. Companies in the unorganized sector which deal in flavors and fragrances serve mostly the tobacco and incense stick markets. Unorganized players offering surfactants serve local, unbranded soap, and detergent makers.
Impact of COVID-19:
In the past few years, the market experienced a steady upward trend, proving to be one of the most robust parts of India’s manufacturing sector. The COVID-19 pandemic and the nationwide lockdown to control it disrupted manufacturing. While supply chain disruptions marked the first few weeks of the lockdown, the specialty chemicals industry was one of the first to return to normalcy. Within the first two weeks of the lockdown relaxation, several players with links to essential components (such as medically essential chemicals) were able to restart operations, although partially. However, the industry continued to face issues such as unavailability of labor at plants and for product processing and loading, limited transportation facilities, and stock pileups at ports. On the demand side, certain end-use markets were completely insulated such as medicines, hygiene, and personal care goods. On the other hand, automotive, construction, and textiles witnessed a drop in demand due to the global recession and fragile economic activity.
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