China looks to India for investment in its chemical, pipe & fitting industries

On Jan 25, 2016

A business seminar titled China Cangzhou (India) Economic and Trade Cooperation Promotion was held in New Delhi. The senior officials from both the governments (India and China) attended the seminar. The seminar was co-organized by The Federation of Indian Micro and Small & Medium Enterprises (FISME). The seminar intended to improve business relations between the two developing countries in the Chemical sector.

With Asia’s growing contribution to the global chemical industry, India emerges as one of the focus destinations for chemical companies worldwide. With the current size of approximately $108 billion, the Indian chemical industry accounts for 3% of the global market. Reports suggest that, Indian chemical industry could grow to reach a size of $224 billion by 2017. High end–use demand based on increasing per capita consumption, improved export competitiveness and resultant growth impact for each sub-sector of the chemical industry could lead to an overall growth of the industry to a size of $290 billion by 2017.

Petro-chem is the No.1 industry of Cangzhou, boasting the largest PVC production base in Asia and the largest TDI production base in China. Cangzhou is known to be the Pipe and Fitting Manufacturing Base of China, Pipe and Fitting Exporting Base of China, and Capital of Pipes and Elbows of China. The pipes and fittings made in Cangzhou account for about 60% of the total production in China and are exported to more than 90 countries and parts of the world.

A number of initiatives have been proposed to boost the growth of Indian Chemical industry.

Target to increase the share of manufacturing in GDP to at least 25% by 2025 (from current 16%). Investments in manufacturing in the chemical sector are absolutely essential to ensure growth of the Indian chemical industry
Government’s proposal to set up of a technology up-gradation fund of ~USD 80 Mn in the 12th plan for chemicals.
Proposal to establish an autonomous USD 100 Mn chemical innovation fund by securing 10% of the total inclusive national innovation fund set up by the National Innovation Council to encourage commercialization efforts for innovations generating inclusive growth.

This makes China an ideal market for India to invest in, for the chemicals, pipes and fittings industry.