Finance Minister Nirmala Sitharaman on Thursday said that government will consider PLI (Production Linked Incentive) scheme for Indian Chemicals and Petrochemicals sector.
“We are in favour of India becoming a manufacturing hub and we will consider the PLI scheme also for the chemicals and petrochemicals sector,” Sitharaman said while addressing Global Chemicals and Petrochemicals Manufacturing Hubs in India Summit here.
Currently, the PLI scheme is available for 14 sectors, where incentive is given on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a limited period. Key sectors of PLI include electronic manufacturing, bulk drugs; medical devices, pharmaceuticals, telecom and networking products, food items and drones. The scheme aims to boost domestic manufacturing and attract large investments.
Also read: How good a scheme is PLI?
Green mission
The Minister said that the Indian chemical and petrochemicals sector has huge potential, and it also impacts other sectors. She said that the importance of the sector can be gauged from the fact that it manufactures 80,000 products across sectors such as agriculture, infrastructure, textiles and packaging. She stated that India aims to become energy independent by 2047 and achieve net zero by 2070. She urged the industry to play a key role in this mission.
“Net zero cannot be achieved unless each one of the industry and sector contributes to it. We are very focused on green growth, carbon intensity has to be reduced and therefore, each one of the sectors has to contribute towards this,” she said. Highlighting the challenges in the sector, she urged the industry to focus on issues related to sustainability of the products and processes; according to her, there was an immense need for skilling in the industry, as also adopting “Industry 4.0 in a very big way”, and pollution control regulations.
“India has made an impact in the sector globally. The combined exports of major chemicals and petrochemicals in 2022-23 was $9 billion, but also an increase in imports to $13.33 billion. I am quite comfortable with this, but many of these imports are items which can be produced in India and there are some efforts in that direction as well,” she said.
Also read: It’s time to reassess the efficacy of the PLI scheme
Circular economy
Sitharaman also urged the industry to look at ways to become a circular economy and the government will work to consider the industry’s recommendations to make the sector sustainable. She added that the market of specialty chemicals was growing exponentially and the industry in India was expected to grow at 12 per cent CAGR.
“I, therefore, understand the need for more robust support for specialised chemicals. The emergence of this market is driven by the country’s strong process engineering capabilities, low-cost manufacturing capabilities and abundant manpower,” the Finance Minister said.
Bhagwanth Khuba, Minister of State for Chemicals and Petrochemicals, and New and Renewable Energy, said that the government is working towards creating an eco-system for the sector. “The government is working with State governments to set up chemical parks and the process of setting up plastic parks is already in place,” he said.