Mumbai: Union minister for chemicals and fertilisers Sadananda Gowda on Monday said the sector has the potential to contribute over $300 billion to GDP over the next five years when the economy is slated to scale the $5 -trillion-mount.
The chemicals and fertilisers sector, which currently contributes nearly 7.76 percent of manufacturing now, has the potential to reach 20-25 percent in the next five years and can nearly double to $304 billion, he said. "Government has set an ambitious target of making the country a $5-trillion economy by 2025. I believe that the chemicals and fertilizers sector has a huge role to play in this and can contribute $304 billion of that, up from the present $160 billion," Gowda said at the India chemicals summit here.
Assuring the industry of all the necessary support, he urged the stakeholders need to work hard to realize its full potential and said "certainly this is not an impossible target. Though I am satisfied at the present growth rate, I believe we can grow faster on the back of the right policies." With per capita income steadily increasing, the mid income population presents a huge market. It is expected that the chemical industry will grow at 9 percent annually over the next five years," Gowda said.
He also said government is committed to provide a predictable and market-friendly policy framework to enable companies to take investment decisions and pointed to the enabling reforms such as GST, relaxed FDI norms, labour reforms and bankruptcy laws.
These initiatives have made the country one of the most attractive investment destinations leading to an inflow of $280 billion foreign capital during the past five years alone, Gowda said.
He further said government has already approved setting up of four petroleum, chemicals and petrochemical investment regions in Gujarat, Andhra Pradesh, Odisha and Tamil Nadu. Upon completion, these regions will be home to around Rs 8 lakh crore investments, and are likely to generate over 4 million jobs.
Chemicals and petrochemicals secretary P Raghavendra Rao said the country still imports chemicals worth billions of dollars, underlining the huge untapped opportunity for growth. "As we are expecting the industry to grow to $304 billion by 2025, imports are also likely to increase to $126 billion. This indicates that as the market grows, trade deficit is also growing at a faster rate. We need to see this $126 billion as an opportunity to increase our own production," he said.
According to statistics, in FY18, the market was worth $163 billion, of which imports were worth $55 billion.
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