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ďHow will Gujarat Continue to Lead the Chemicals & Petrochemicals Industry in India?Ē
Gujaratís chemicals and petrochemicals industry is one of the fastest growing sectors in the stateís economy, and is the leader in the production of chemical and allied products in India. The state has become one of the most preferred locations for industrial investment in the country. Jaimin Vasa, President, Gujarat Chemical Association, Managing Director, Vasa Pharmachem Pvt Limited and Chairman, MSME-Committee, Gujarat Chamber of Commerce and Industry, writes.

Chemical industry is one of the oldest industries in India. It not only plays a crucial role in meeting the daily needs of the common man, but also contributes significantly towards industrial and economic growth of the nation

The chemical industry covers agrochemicals, paints & coatings, specialty polymers, home care surfactants, plastic additives, textile chemicals, construction chemicals, water chemicals, personal care ingredients, flavours & fragrances, paper chemicals, printing inks, industrial & institutional cleaners, rubber chemicals etc.

This segmentation does not highlight the colorants separately (dyes & pigments) as the colorants, which are mostly used in many of the listed categories of specialty chemicals like paints & coatings, inks, plastic additives, textile chemicals etc, are the most diversified of all industrial sectors.

Contribution of Chemical Industry in India
The Indian chemical industry is an integral component of the Indian economy. Indian chemical industry currently accounts for more than 3 per cent of the global chemicals industry (~USD 3.4 Trillion) but is expected to account for~6 per cent of the same (Expected to be ~USD 5 trillion) by 2022.

India has a robust base for chemicals and petrochemicals-driven businesses. Though the industry has undergone drastic changes, Indian chemicals and petrochemicals share has been continuously increasing on a constant basis. India also produces a large number of fine and specialty chemicals, which have very specific uses and are essential for increasing industrial production.

Contribution of Chemicals Industry in Gujarat
Gujarat s chemicals and petrochemicals industry is one of the fastest growing sectors in the state s economy and is the leader in the production of chemical and allied products in India. Gujarat is also known as the 'Petro Capital' of India.

According to the Ministry of Chemicals and Fertilizers, Government of India, the state accounts for 51 per cent share of the production of major chemicals, including organic chemicals, inorganic chemicals, alkali, pesticides and dyes & dyestuffs.

According to the Industries Commissionerate, Government of Gujarat, Gujarat produces around 94 per cent soda ash, 80 per cent salt and 42 per cent caustic soda of the total production in India. Also, Gujarat contributes significantly to the country s petrochemicals production (62%), chemicals production (51%) and pharmaceuticals production (35%).

The chemical industry is today the largest and fastest growing component of Gujarat s manufacturing sector.

Gujarat contributes around 15 per cent of the country s chemical exports, bulk of which is to USA, Europe and other developed nations.

There has been a considerable increase in the number of MoUs signed and investment proposals made for projects executed and established in the chemical and petrochemical sector during various ¬Vibrant Gujarat  summits. Environmental Concerns
Manufacturing standards of developed economies are aimed to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of chemical substances. Globally, the awareness towards concept of environmental safety and management is rising with a rapid pace.

Therefore, Government of Gujarat is promoting green technologies and Ecofriendly solution by way of incentives.

Raw Material Availability
Gujarat has witnessed growth in chemical industries because of availability of mineral oil and port facilities of Kandla through which raw materials can be imported easily. Blessed with natural resources such as limestone, salt, Gujarat is one of leading manufacturer of basic chemicals, including caustic soda, caustic potash, which facilitates production of a large number of downstream chemical products. Beside these, minerals, natural gas, limestone, dolomite, gypsum etc are also available here in large quantity.

Gujarat also has reserves of limestone and clay deposits in Saurashtra region.

Manufacturers are leading the course in the domestic and international market with new products, technological advancement and thorough research and development (R&D).

Foreign Investments in Gujarat
Gujarat has been the leading state in terms of attracting investment for chemicals industry. FDI inflows into the chemical industry have increased over the last few years, owing to several incentives by the Government of India and Government of Gujarat. Gujarat s business friendly policies have made it the first choice for investors.

Gujarat is the only state to emerge as ¬Investor friendly . Gujarat has achieved the distinction of being the top most industrially developed state in India in respect of investment in industrial sector and second among states in respect of value of production and value addition in industrial sector in India.

Over the years, Gujarat has become one of the most preferred locations for industrial investment in India.

Industries Associations  Role
Industry bodies - like Gujarat Chemical Association and Gujarat Chamber of Commerce & Industry - are acting as a helping hand to its members, right from inception to the promotion of its products, and also to performing as a bridge between manufacturers and the government.

The government agencies are building and providing the necessary infrastructure and ease trade barriers for the economic development of the chemical industry.

Government Initiatives
The Gujarat government policy provided enough support for development of micro, small and medium sized chemical & petrochemical industries in the state.

Some of the key policy features include interest subsidy on loans for modernisation programmes, interest subsidy on eligible parameters, like sector, size, etc., venture capital and patent monetisation assistance, technology acquisition fund, support for vendor development, support for auxiliary industries for value-addition, cluster development in PPP mode, rehabilitation of sick units, etc. (See the illustration)

Since Gujarat state has following advantages, it will continue to lead the Chemicals and Petrochemicals industry in India:-
  • Gujarat is well-connected to major trade routes to Europe, Middle-East, East Asia and Australia.
  • Gujarat has nearly 38 per cent (564 km) of the dedicated freight corridor passes through. Gujarat state, having one-fifth of country s coastline (1,600 km) with 41 ports, second highest in the country.
  • The state also targets to handle 40 per cent of the traffic through Indian ports by 2020.
  • Gujarat is the only state in India organising the ¬Vibrant Gujarat  Summit a biennial summit organised to attract foreign investment for development of Gujarat aimed at bringing together business leaders, investors, corporations, thought leaders, policy and opinion makers. This summit served as a perfect platform to understand and explore business opportunities with the State of Gujarat. During these Summit large-scale investments flow from the partner countries.
  • Japan has a cooperation pact with the Union Government for 19 projects, of which seven are proposed in Gujarat. In fast-industrialising zones of Dahej and Sanand in the state, two ¬Smart City  projects by Japan are proposed.
  • Gujarat is the only state in India having concentration of petroleum, chemical and petrochemical estates around PCPIR. Out of the all the PCPIRs in India, Gujarat PCPIR has the benefit of rich natural resources and feedstock, chemical port and storage facility and PCPIR-specific infrastructure - effluent disposal pipelines, solid waste disposal sites.
  • Gujarat is the only state have better infrastructure like road, rail, port, power, gas, water with planned up-gradation.
  • Gujarat is the only state in India with Integrated State Wide Gas Grid and having 24 hours uninterrupted electricity. Gujarat is the only state in the country to have LNG terminals (at Dahej & Hazira)
  • Over and above it is clearly evident that Gujarat is definitely poised to become the global business hub of India, under the dynamic and visionary leadership of Chief Minister (Shri) Narendrabhai Modi. To progress continually, the Government of Gujarat is constantly in the process of identifying new avenues of investment opportunities not only in the industrial sector, but in the chemical sector as well.

Due to all these innovative, constructive and result oriented progressive policies of the State Government for the promotion of Chemical and Petrochemical Industries, Gujarat seems to be lead chemical and petrochemicals industries in India for long.