India’s chemical sector is on the cusp of a transformative shift, with a massive $25–30 billion opportunity to substitute imports through domestic manufacturing, according to SRF Chairman and Managing Director Ashish Bharat Ram. Speaking to media on September 3, 2025, Bharat Ram emphasized that India’s $4 trillion economy now has the scale to justify investments in chemical plants that were previously unviable due to limited domestic demand.
The SRF CMD highlighted that a significant portion of chemical intermediates used in everyday products—such as shampoos, soaps, and detergents—are still imported, primarily from China. With rising consumption and a diversified industrial base, India is now positioned to build local capacity for these chemicals, reducing dependency and strengthening supply chains.
🧭 Key Highlights from SRF CMD’s Statement
| Focus Area | Insight from Ashish Bharat Ram | Strategic Implication |
|---|---|---|
| Import Substitution Potential | $25–30 billion opportunity in chemicals | Boosts self-reliance and manufacturing |
| Economic Scale | India’s $4 trillion GDP enables domestic viability | Supports large-scale chemical investments |
| Product Categories | Household items, crop protection, refrigerants | Broad-based industrial impact |
| Investment Horizon | 3–5 years for SRF’s capacity expansion | Long-term growth and job creation |
| China Dependency | High for chemical intermediates | Opportunity to de-risk supply chains |
Bharat Ram stated, “As a $2-trillion economy, it would not have made sense to put up capacity to compete with China. But today, India can consume a majority of the output, making domestic investment viable.”
🔍 Why India’s Chemical Sector Is Ripe for Import Substitution
India’s chemical industry is the sixth largest in the world, yet it remains heavily reliant on imports for key intermediates and specialty chemicals. The shift toward domestic production is driven by several macroeconomic and policy factors:
- Rising Consumption: India’s growing middle class and urbanization are driving demand for consumer goods and industrial chemicals.
- Policy Support: Government initiatives like the PLI scheme and Make in India are incentivizing local manufacturing.
- Geopolitical Risks: Global supply chain disruptions and trade tensions with China have exposed vulnerabilities.
- Technology Upgrades: Indian firms are investing in R&D and process innovation to match global standards.
| Driver of Change | Description | Impact on Chemical Sector |
|---|---|---|
| Domestic Demand | Surge in FMCG, pharma, and agrochemicals | Higher consumption of intermediates |
| Trade Diversification | Need to reduce China dependency | Encourages local sourcing |
| Infrastructure Expansion | New chemical parks and clusters | Facilitates scale and logistics |
| Environmental Compliance | Global ESG norms pushing cleaner processes | Opportunity for green chemistry leadership |
📉 SRF’s Strategic Shift Toward Chemicals
SRF, once known primarily for technical textiles, has undergone a major transformation over the past two decades. Today, specialty chemicals are its largest and most profitable business segment, contributing significantly to its $1.7 billion revenue.
| Business Segment | Revenue Share (2005) | Revenue Share (2025) | Strategic Focus |
|---|---|---|---|
| Technical Textiles | 70% | 15–18% | Tyre cord, industrial fabrics |
| Specialty Chemicals | 20% | 60%+ | Crop protection, pharma intermediates |
| Packaging Films | 10% | 20% | BOPP, BOPET films |
SRF supplies active ingredients and intermediates to global giants like Syngenta, Bayer Crop Sciences, and BASF. It is also the dominant supplier of refrigerant gases for India’s air conditioner market.
🔥 Chemicals with High Import Dependency
Bharat Ram pointed out that even basic household products rely on imported chemical intermediates. These include surfactants, emulsifiers, solvents, and preservatives used in personal care and cleaning products.
| Product Category | Imported Chemical Intermediates | Source Country | Substitution Potential |
|---|---|---|---|
| Personal Care (Shampoos, Soaps) | Surfactants, preservatives, fragrances | China, Germany | High |
| Agrochemicals | Active ingredients, solvents | China, Israel | Medium to High |
| Pharmaceuticals | API intermediates, excipients | China, Italy | Medium |
| Refrigerants | Fluorochemicals, blends | China, USA | High |
SRF’s upcoming investments will target these categories, aiming to build backward integration and reduce import reliance.
🧠 Expert Commentary and Industry Sentiment
| Expert Name | Role | Comment |
|---|---|---|
| Meera Iyer | Chemical Industry Analyst | “India’s scale now supports domestic production of previously unviable chemicals.” |
| Rajiv Bansal | Trade Policy Consultant | “Import substitution in chemicals aligns with India’s strategic autonomy goals.” |
| Dr. Rakesh Sinha | Manufacturing Strategist | “SRF’s pivot to chemicals is a textbook case of industrial evolution.” |
Industry leaders believe that India’s chemical sector is entering a golden era, with opportunities across specialty, bulk, and green chemicals.
📦 Policy Recommendations to Accelerate Import Substitution
To fully capitalize on the $30 billion opportunity, experts suggest a multi-pronged policy approach:
- R&D Incentives: Tax breaks and grants for chemical innovation.
- Cluster Development: Integrated chemical parks with shared utilities.
- Skill Development: Training programs for chemical engineers and technicians.
- Environmental Clearances: Streamlined approvals for green projects.
- Export Facilitation: Support for global market access and branding.
| Policy Area | Recommended Action | Expected Outcome |
|---|---|---|
| Innovation | R&D grants, patent support | Higher value-added products |
| Infrastructure | Chemical clusters, logistics hubs | Economies of scale |
| Talent | Industry-academia partnerships | Skilled workforce |
| Regulation | Single-window clearance | Faster project execution |
| Trade | FTAs and export incentives | Global competitiveness |
📌 Conclusion
India’s chemical sector stands at a strategic inflection point, with a $25–30 billion import substitution opportunity waiting to be unlocked. As SRF CMD Ashish Bharat Ram rightly points out, India’s economic scale now supports domestic investments in chemical manufacturing that were once unviable. With policy support, industry innovation, and rising demand, India can emerge as a global leader in specialty and industrial chemicals. SRF’s pivot and planned investments signal the beginning of a new chapter in India’s industrial self-reliance.
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Disclaimer: This article is based on publicly available interviews and media reports as of September 4, 2025. It is intended for informational purposes only and does not constitute financial, investment, or strategic advice.
