In our previous
blog we focused on China as an emerging market and discussed on the current and
future market situations. China is one of the top contenders and multi
nationals are customizing their services and products to target the larger
population of China. In this blog we will enumerate on the next competitive
emerging market in the world.
highest populous country in the world, India is one of the four fastest growing
economies out of BRIC (Brazil, Russia, India and China), a term coined by Goldman
Sachs Jim O'Neill to describe the "Big Four" fast-growing emerging market
economies that were expected to surpass the developed economies by the 2020s.
The reasons for this is attributed to many recent developments, both locally as
well as globally. One of the main reasons for its growth is the government's
growth conducive reforms and global slowdown. Other reasons include increased
per capita income, increase in FDI, infrastructure development etc.
The recent dip
in oil prices globally has had a positive impact on India as it imports 75% of
its energy consumption. It has helped reduce the current account deficit and is
also a reason for the decrease in inflation. Also, India?s proximity to the
Middle East makes for economies of scale. The decrease in oil prices has
slashed the energy imports bill and a lot of money may be saved. Not only the
import costs are decreased but also input costs to many manufacturing companies
such as paint, cosmetic, FMCG, automobile industries which use crude oil
Minister's recent "Make in India" campaign was launched in September 2014 as an
initiative to encourage manufacturing companies, MNCs as well as domestic, to
manufacture in India. His recent frequent foreign trips have resulted in many
investments from abroad such as: Mitsubishi Chemical Corporation (Japan), BASF
(Germany), Akzo Nobel (Netherlands), Dow Chemicals (USA), Croda (UK), Rhodla
Chemical Industry in India
industry is one of the oldest industries in India and is the third largest
producer in Asia. It is poised to grow at 9% per annum and its worth is
expected to become 200 billion USD by 2020. India currently accounts for
approximately 3% of the world?s chemical market. The Indian chemical industry
is a diversified sector with 80,000 chemicals that can be exported to many
countries like Middle East, Korea, Japan and Singapore. In addition, industrial
licensing has been abolished for most sub sectors except for certain hazardous
chemicals. The ?Make in India? campaign could well be the next big step in the
manufacturing sector growth.
opportunities in the Indian chemical industry lies with the agro-chemicals,
polymers, specialty chemicals and dyestuffs. India exports about 50% of its
current production of agro chemicals and 75% of colorants while the specialty
chemical sector has grown by 14%. Other industries that provide opportunities include
polymers, petrochemicals and bio-based products. Some growth drivers for the
chemical industry in India are:
- Low cost manufacturing
- Large population
- High domestic market demand
- Immense scope for new investments
- Strong R&D capabilities.
India's expertise in developing low
cost yet high end chemical products is the key growth driver for Indian
chemical exports. Some of the major export countries where Indian products are
in demand are: USA, UK, Europe, South Africa, Bangladesh, Malaysia and
Actions to be taken:
- Ensuring availability of feedstock
such as coal, oil & gas and supply of raw materials at competitive rates.
- Develop and maintain the chemical inventory,
which will help to understand the import and export knowledge and therefore
target specific industries.
- Companies should strive to
manufacture products using cutting edge technology to cater to global market.
- Chemical industries must work in
close collaboration with end-use industries to help innovate products suited to
- There are good opportunities in
segments such as Speciality Chemicals, Speciality Polymers, for catering to
huge emerging domestic demand as also as a manufacturing hub.
Global slowdown has increased the
pace for India's robust growth rate and it is poised to become a manufacturing
hub by 2030. Our next and final blog on emerging markets will do a roundup of
Middle East, Africa and Latin America markets. If you have any enquiries
regarding the blog or about our products, get in touch with us.