World’s chemical nucleus
Market size of chemicals and petrochemicals sector in India is worth $165 bn.
Chemicals industry in India is highly diversified, covering more than 80,000 commercial products. It is broadly classified into bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers and fertilizers. India’s proximity to the Middle East, the world’s source of petrochemicals feedstock, makes for economies of scale.
India is a strong global dye supplier, accounting for approximately 16% of the world production of dyestuff and dye intermediates. Chemicals industry in India has been de-licensed except for a few hazardous chemicals. Upcoming Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) and Plastic parks will provide state-of-the-art infrastructure for chemicals and petrochemicals sector.
- The chemicals and petrochemicals market is projected to reach $300 bn by 2025.
- India ranks 14th in export and 8th in import of chemicals (excluding pharmaceutical products) globally.
- Demand of chemical products is expected to grow at approximately 9% p.a. over the next 5 years.
- Indian chemical industry employs more than 2 million people.
100% FDI is allowed under the automatic route in the chemicals sector (except in the case of certain hazardous chemicals)
Market size of the chemicals industry in India stood at $180 bn in 2019.The production of total major chemicals and petrochemicals in 2019-20 (upto September 2019) was 13,871 thousand MT. CAGR in production of total chemicals and petrochemicals during the period 2014-15 to 2018-19 is 4.78%. Alkali chemicals accounts for around 71% of the total production of major chemicals for the year 2019-20 (upto September 2019).
- The petrochemical demand is expected to grow at 7.5% CAGR from FY 2019-23, with polymer demand growing at 8%.
- The agrochemicals market in India is expected to grow at 8% CAGR reaching $3.7 bn by FY22 and $4.7 bn by FY25.
- The specialty chemicals constitute 18% of total chemicals and petrochemicals market in India. As of FY19, the total market size is around $32 bn. The demand for speciality chemicals is expected to grow at 12% CAGR from FY19-22.
Building a sustainable future
The construction industry in India consists of the real estate as well as the urban development segment. The real estate segment covers residential, office, retail, hotels and leisure parks, among others. While urban development segment broadly consists of sub-segments such as water supply, sanitation, urban transport, schools, and healthcare.
- By 2025, construction market in India is expected to emerge as the third largest globally.
- By 2025, construction output is expected to grow on an average by 7.1% each year.
- By 2020, construction equipment industry’s revenue is estimated to reach $ 5 bn.
100% FDI under automatic route is permitted in completed projects for operations and management of townships, malls/shopping complexes, and business constructions.
100% FDI is allowed under the automatic route for urban infrastructures such as urban transport, water supply and sewerage and sewage treatment.
The construction industry in value terms is expected to record a CAGR of 15.7% to reach $ 738.5 bn by 2022.
The industry contributes 55% share in the steel industry, 15% in the paint industry and 30% in the glass industry.
The construction industry in India is expected to grow at 5.6% during 2016-20, compared to 2.9% during 2011-15. The activities that registered the highest growth include export cargo (10%), highway construction/widening (9.8%), power generation (6.6%), import cargo (5.8%) and cargo at major ports (5.3%).
- India will be required to spend $ 454.8 bn on infrastructure development over the period of five years (2015-20), with 70% of funds needed for power, roads, and urban infrastructure segments.
- Expected cement capacity addition of 80-100 MT per annum over next five years.
Connecting the world
The telecom industry in India is the second-largest in the world with a subscriber base of over 1.2 bn. The industry has witnessed exponential growth over the last few years primarily driven by affordable tariffs, wider availability, roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, evolving consumption patterns of subscribers and a conducive regulatory environment.
Indian smartphone users consume maximum data in the world at 12GB/month and which could increase to 25 GB/month by 2025.
- Total number of Subscriber Identity Module (SIM) connections is expected to reach 1.4 bn by 2020 from 1.1 bn in 2017.
- Telecom industry contribution to GDP is expected to reach 8.2% by 2020 from 6.5% in 2017.
100% FDI is allowed in the telecom, wherein upto 49% is allowed through the automatic route and beyond 49% under government route.
The Indian mobile industry is expected to create a total economic value of $217.4 bn by 2020.The telecommunications industry is divided into following subsectors: infrastructure, equipment, Mobile Virtual Network Operators (MNVO), White Space Spectrum, 5G, telephone service providers and broadband.
As per GSMA, India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 billion installed devices and is expected to have 920 million unique mobile subscribers by 2025 which will include 88 million 5G connections.
Telecom tower in India is set to boom as its tenancy ration will increase from 1.95 times in 2016 to 2.9 times by 2020 due to the expansion of 3G and 4G and the onset of 5G technologies.
5G is set to be a game changer for the telecom industry and is expected to yield enormous economic opportunities over the next three to five years. India has the potential to unlock $48.69bn through the deployment of 5G over the next four years.
More than 70 companies have received approval from the Department of Telecommunications (DoT) to provide MVNO services. The majority of these companies are focused on Tier 2 and Tier 3 cities.
The DoT is targeting a combination of 100% broadband connectivity in the villages, 55% fiberisation of mobile towers, average broadband speeds of 25 mbps and 30 lakh kms of optic fibre rollouts by December 2022. By December 2024, it is looking at 70% fiberisation of towers, average broadband speeds of 50 Mbps and 50 lakh kms of optic fibre rollouts at a pan-India level.
Source: INVEST INDIA, Department of Promotion of Industry and Internal Trade, Government of India