The country's chemical industry is expected to grow at around 9 per cent per annum to reach $304 billion by FY25, from 163 billion in FY18, a report said.
The growth is likely to be driven by rising demand in end-use segments for specialty chemicals and petrochemicals intermediates said the India ChemStrategy report by Tata Strategic group, brought in association with leading industry body Ficci.
The country's chemical industry is one of the fastest growing in the world, currently ranked the third largest in Asia and sixth globally with respect to output after the US, China, Germany, Japan and Korea.
The study said the domestic chemical sector (other than fertiliser) attracted FDI investment of $1.3 billion in FY18, which is about 3 per cent of the total FDI inflow.
Noting that the domestic chemical industry's growth is largely driven by country's consumption growth story, the report said the per capita consumption of chemicals in the country is 1/10th of world average with India a low consumption country even amongdeveloping nations.
"Indian consumption is low. This makes India a very attractivedestination to invest and grow," the report said.
The study also noted that Indian chemical companies have started focusing on globalmarkets for investments.
Recently, India's largest agrochemical company, UnitedPhosphorous, announced the acquisition of Arysta Lifescience for about USD 4.2 billion.
Among the other mega projects, Saudi Aramco showed interest in investing $44,000 million in mega petrochemical project, ONGC plans investment of $11,000 million in greenfield oil and gas project and Sabic is investing $4,300 million in brownfield petrochemical complex.
Deepak C Mehta, chairman-FICCI national chemical committee and chairman and managing director, Deepak Nitrite, feels the significantly growing domestic market and the upheaval in international markets, particularly with respect to China, augur well with opportunities for the Indian chemicalindustry to rapidly grow in size and capability.
"As India gains increased traction from major countries, looking at investment in the Indianchemical sector, both driven entrepreneurs and a positive government need to put theircombined vigour to grow the chemical industry multi-fold in the coming decade," Mehta said.
The country musttarget to become the third largest player in the next few years, he added.
According to BASF India chairman and managing director Raman Ramachandran, the chemical industry will be a key enabler and catalyst in achieving the target of $1 trillion manufacturing economy by 2028, from the current $380 billion.
"The projectedhigh local demand will provide us a strong platform to also establish ourselves as majorsupplier of specialty chemicals to the world with right investments.
"Thus, the chemical sector isvery strategic to achieving our countrys vision encompassed in Make in India, SwachhBharat, Housing for All and Power for All," he said.