Why you should watch

India’s specialty chemicals sector has strong long-term demand driven by multiple end-use industries, but recent challenges have come from pricing pressure, especially due to oversupply and dumping from China. The slowdown seen in the past couple of years was largely due to inventory correction in global markets rather than a real drop in consumption. Now, early signs of recovery are visible, particularly in export markets like the US and Europe, although pricing may take more time to stabilize.

To compete globally, Indian companies need to focus on improving scale, cost competitiveness, and technology. This means higher investment in R&D, moving toward niche and specialty products instead of commodities, and adopting flexible manufacturing systems. Collaboration across the value chain, better supply chain management, and operational efficiency are also critical to withstand global competition and volatility.

Sustainability and ESG compliance have become essential rather than optional. Companies are increasingly focusing on green energy, zero liquid discharge, and efficient resource usage. Support from the government in terms of faster approvals, infrastructure development, and policy simplification will play a key role in helping the industry fully benefit from the China+1 opportunity and emerge as a global manufacturing hub.