Executive Summary
- The Manufacture of Chemicals & Chemical Products sector in India (NIC 20) has emerged as a strategic beneficiary of the China Plus One global supply chain reconfiguration, supported by a large industrial base of over 6,200 companies and rising export-oriented manufacturing activity.
- Between 2022 and 2024, the sector delivered solid revenue growth (CAGR +6.9%), reflecting steady demand from global sourcing diversification and India’s expanding domestic industrial consumption. At the operating level, profitability continued to improve, supported by scale efficiencies and better utilization.
- However, margin normalization remains evident, as rising input costs and higher compliance- and capacity-related investments weighed on net profitability. Overall, India is increasingly positioned as a complementary chemical manufacturing base to China, particularly in specialty chemicals and intermediates, rather than a full substitute for large-scale commodity production.
Industry Snapshot 2024
The Manufacture of Chemicals & Chemical Products sector (NIC 20) represents a broad set of producers supplying inputs to pharmaceuticals, agrochemicals, consumer goods, infrastructure, and industrial manufacturing.
In 2024, companies in this category generated Total Revenue of USD 388.3 billion, reflecting a CAGR of +6.9% from 2022 to 2024. Over the same period, Cost of Goods Sold reached USD 224.7 billion, growing at a CAGR of +6.6%, indicating sustained production expansion alongside cost inflation.
The sector recorded Operating Profit of USD 48.3 billion, equivalent to a CAGR of +5.1%, demonstrating resilience at the operating level despite rising costs. Net Profit totaled USD 31.3 billion, declining at a CAGR of -1.9%, reflecting margin normalization and increased investment in capacity, compliance, and environmental controls.
As of 2024, 6,236 companies were active under NIC 20, underscoring the scale and fragmentation of India’s chemical manufacturing base.
Industry Characteristics & Operating Landscape
Where do companies typically operate?
Chemical manufacturing activity in India is concentrated in cluster-based industrial hubs, led by Gujarat and Maharashtra, where access to ports, petrochemical feedstock, and established industrial ecosystems supports large-scale production. Additional capacity is present across select southern states, reinforcing India’s role as both a domestic supply center and an export-oriented manufacturing base.
These clusters enable shared utilities, logistics efficiencies, and integration with downstream industrial customers.
What drives demand in this sector?
Demand is increasingly shaped by China Plus One-driven risk diversification, where global buyers adopt dual-sourcing and multi-site procurement to reduce concentration risk in China. In chemicals, this shift is most pronounced in specialty chemicals and intermediates – segments where India’s strengths in process chemistry, engineering talent, and export compliance enable faster qualification and repeat orders.
India also benefits from a strong downstream pull: its scale in pharmaceuticals (including APIs/formulations), agrochemicals, consumer and industrial manufacturing, and infrastructure build-out continuously expands demand for chemical inputs. As supply chains rebalance, India is positioned as a complementary production base that captures incremental volumes and new customer mandates, rather than a full replacement for China’s commodity-scale chemical platform.
What defines the operational model?
The sector operates under a capital- and efficiency-led manufacturing model, where profitability is shaped by capacity utilization, cost discipline, and compliance capability. Scale advantages and integration across the value chain remain critical, particularly as companies upgrade facilities to meet international quality, safety, and environmental standards.
Export-ready producers with flexible production processes are best positioned to benefit from China Plus One-driven supply chain reconfiguration.
Interpreting the 2022-2024 Performance
Revenue growth over the period reflects India’s strengthening role in diversified global supply chains, while operating profit expansion signals improving utilization and scale benefits. However, the slight decline in net profit highlights ongoing margin pressure from raw material volatility, energy costs, and compliance investments.
Overall performance suggests a sector transitioning from volume-led expansion toward more disciplined, efficiency-driven growth, aligned with global sourcing realignment rather than pure cost competition.
What This Means for Investors
- For investors, India’s NIC 20 sector offers exposure to China Plus One-aligned manufacturing diversification, with particular opportunity in specialty chemicals and intermediates rather than bulk commodities.
- Key considerations include:
- Positioning within global buyer sourcing strategies
- Ability to scale production while maintaining compliance and cost control
- Exposure to export-oriented versus purely domestic demand
- Companies with strong utilization discipline, export readiness, and differentiated process capabilities are best placed to capture incremental value as global chemical supply chains continue to rebalance.
About Datagent
Datagent is the trusted intelligence partner for company data and insights across Southeast Asia and beyond. We combine firmographics, financials, macro and micro economics into one integrated dataset — helping organizations uncover opportunities, assess markets, and make smarter, data-backed decisions across 11 dynamic economies.
Datagent provides a total of 61 firmographic data fields, comprising 22 non-financial, and 39 financial indicators with coverage spanning 2022–2024.
This report is for informational purposes only and does not constitute financial advice or an invitation to invest. Decisions should be based on independent research and professional consultation to avoid any unintended liabilities.