Export of chemical from India to U.S.

1. INTRODUCTION

INDIAN CHEMICAL INDUSTRY

1.1 HISTORY

Chandler (2005) argues the relative success or failure of American and European chemical

companies is explained with reference to three themes: "barriers to entry," "strategic

boundaries," and "limits to growth." He says successful chemical firms followed definite "paths

of learning" whereby first movers and close followers created entry barriers to would-be rivals

by building "integrated learning bases" (or organizational capabilities) which enabled them to

develop, produce, distribute, and sell in local and then worldwide markets. Also they followed a

"virtuous strategy" of reinvestment of retained earnings and growth through diversification,

particularly to utilize "dynamic" scale and scope economies relating to new learning in launching

"next generation" products.

1.1.1 Companies in 21st century

The chemical industry includes large, medium, and small companies that are located worldwide.

Companies with sales of chemical products greater than $10 billion dollars in fiscal year 2007

are shown below. For some of these companies the chemical sales might represent only a portion

of their total sales; (for example ExxonMobil’s chemical sales were only 8.7 percent of their total

sales in 2005).

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Export of chemical from India to U.S.

COMPANY, HEADQUARTERS2007 Chemical Sales,

billionsRank Country

BASF SE, Ludwigshafen, Germany $65.3 1

Dow Chemical, Midland, Michigan, USA $53.5 2

INEOS, Lyndhurst, UK $43.6 3

LyondellBasell, Houston, Texas, USA $42.8 4

Formosa Plastics, Taiwan $31.9 5

DuPont, Wilmington, Delaware, USA $28.5 6

Saudi Basic Industries Corporation, Riyadh, Saudi

Arabia$26.4 7

Bayer, AG, Leverkusen, Germany $24.2 8

Mitsubishi Chemical, Tokyo, Japan $22.2 9

Akzo Nobel/Imperial Chemical Industries(ICI),

Amsterdam/London$19.9 10

Air Liquide, Paris, France $16.3 11

Sumitomo Chemical, Tokyo, Japan $15.2 12

Evonik Industries, AG, Essen, Germany $15.0 13

Mitsui Chemicals, Tokyo, Japan $14.3 14

Asahi Kasei, Tokyo, Japan $13.8 15

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Toray Industries, Tokyo, Japan $13.1 16

Chevron Phillips, The Woodlands, Texas, USA $12.5 17

DSM NV, Heerlen, Netherlands $12.1 18

PPG Industries, Pittsburgh, Pennsylvania, USA $11.2 19

Shin-Etsu Chemical Co., Ltd., Tokyo, Japan $11.1 20

The chemical industry is one of the oldest domestic industries in India, contributing

significantly to both the industrial and economic growth of the country since it achieved

independence in 1947. The chemical industry currently produces nearly 70,000 commercial

products, ranging from cosmetics and toiletries, to plastics and pesticides.

The chemical industry comprises the companies that produce industrial chemicals. It is

central to modern world economy, converting raw materials (oil, natural gas, air, water, metals,

minerals) into more than 70,000 different products.

The wide and diverse spectrum of products can be broken down into a number of

categories, including inorganic and organic (commodity) chemicals, drugs and pharmaceuticals,

plastics and petrochemicals, dyes and pigments, fine and specialty chemicals, pesticides and

agrochemicals, and fertilizers.

The Indian pesticide industry has advanced significantly in recent years, producing more

than 1,000 tons of pesticides annually. India is the 13th largest exporter of pesticides and

disinfectants in the world, and in terms of volume, is the 12th largest producer of chemicals. The

Indian agrochemical, petrochemical, and pharmaceutical industries are some of the fastest

growing sectors in the economy. With an estimated worth of $28 billion, it accounts for 12.5

percent of the country's total industrial production and 16.2 percent of the total exports from the

Indian manufacturing sector.

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With a special focus on modernization, the Indian government takes an active role in

promoting and advancing the domestic chemical industry. The Department of Chemicals &

Petro-Chemicals, which has been part of the Ministry of Chemicals and Fertilizers since 1991, is

responsible for policy, planning, development, and regulation of the industry. In the private

sector, numerous organizations, including the Indian Chemical Manufacturers Association, the

Chemicals and Petrochemicals Manufacturers Association, and the Pesticides Manufacturers and

Formulators Association of India, all work to promote the growth of the industry and the export

of Indian chemicals. The Indian Chemical Manufacturers Association, for example, represents a

large number of Indian companies that produce and export a number of chemicals that have

legitimate commercial applications, but also can be used as precursors and intermediates for

chemical weapons production.  

The Chemical Industry in India constitutes of numerous chemical exporters, chemicals

manufacturers and chemicals suppliers dealing in fine chemicals, organic chemicals and

inorganic chemicals. The chemical and allied industries have been amongst the fastest growing

segments of the Indian industry. In recent years, there has been a significant increase in the

number of inorganic chemical exporters, chemical manufacturers and wholesalers of India. The

current annual turnover in the chemical sector is around Rs. 90,000 crore of which roughly one-

third is contributed by the three main sub-sectors, namely, chemicals, petrochemicals and

pharmaceuticals. The chemical industry sector, comprising of fine chemicals and organic and

inorganic chemicals, accounts for about 17 per cent of the country’s total industrial production

and 16 per cent of the export of manufactured goods.

1.1.2 OVERVIEW:

Total US$30.59 Billion during 2005-2006 as per March 2007 report.

Contributes to 3% of GDP in the same report.

One of the fastest growing sectors of Indian economy.

Chemical Industry in India is fragmented and dispersed - multi product and multi faceted.

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Export of chemical from India to U.S.

Chemicals sold directly to large customers and through distribution channels.

Distribution channels mostly consist of stockists and dealers spread all over India

addressing small segments and retail market.

1.1.3 SECTOR HIGHLIGHTS 

The Basic inorganic chemical and organic chemical industry constitutes a major segment

of the country's economy.

 Important chemicals in this category are Soda Ash, Caustic Soda, Liquid Chlorine,

Calcium Carbide, and Acetic Acid. Methanol, Formaldehyde, Phenol, Acetone.

 These are raw materials for industries like detergents, toothpaste, plastics, drugs,

petroleum refining, etc.

 10% of the Chloe-Caustic Plants use Membrane Cell Technology, which will find higher

usage, as no new capacities are allowed for the mercury cell process. 

1.2 Products

Polymers and plastics, especially polyethylene, polypropylene, polyvinyl chloride, polyethylene

terephthalate, polystyrene and polycarbonate comprise about 80% of the industry’s output

worldwide. Chemicals are used to make a wide variety of consumer goods, as well as thousands

inputs to agriculture, manufacturing, construction, and service industries. The chemical industry

itself consumes 26 percent of its own output. Major industrial customers include rubber and

plastic products, textiles, apparel, petroleum refining, pulp and paper, and primary metals.

Chemicals is nearly a $3 trillion global enterprise, and the EU and U.S. chemical companies are

the world's largest producers.

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1.2.1 Product Category Breakdown

Sales of the chemical business can be divided into a few broad categories, including basic

chemicals (about 35 to 37 percent of the dollar output), life sciences (30 percent), specialty

chemicals (20 to 25 percent) and consumer products (about 10 percent).

Basic chemicals, or "commodity chemicals" are a broad chemical category including polymers,

bulk petrochemicals and intermediates, other derivatives and basic industrials, inorganic

chemicals, and fertilizers. Typical growth rates for basic chemicals are about 0.5 to 0.7 times

GDP. Product prices are generally less than fifty cents per pound. Polymers, the largest revenue

segment at about 33 percent of the basic chemicals dollar value, includes all categories of

plastics and man-made fibers. The major markets for plastics are packaging, followed by home

construction, containers, appliances, pipe, transportation, toys, and games. The largest-volume

polymer product, polyethylene (PE), is used mainly in packaging films and other markets such as

milk bottles, containers, and pipe. Polyvinyl chloride (PVC), another large-volume product, is

principally used to make pipe for construction markets as well as siding and, to a much smaller

extent, transportation and packaging materials. Polypropylene (PP), similar in volume to PVC, is

used in markets ranging from packaging, appliances, and containers to clothing and carpeting.

Polystyrene (PS), another large-volume plastic, is used principally for appliances and packaging

as well as toys and recreation. The leading man-made fibers include polyester, nylon,

polypropylene, and acrylics, with applications including apparel, home furnishings, and other

industrial and consumer use. The principal raw materials for polymers are bulk petrochemicals.

Chemicals in the bulk petrochemicals and intermediates are primarily made from liquefied

petroleum gas (LPG), natural gas, and crude oil. Their sales volume is close to 30 percent of

overall basic chemicals. Typical large-volume products include ethylene, propylene, benzene,

toluene, xylenes, methanol, vinyl chloride monomer (VCM), styrene, butadiene, and ethylene

oxide. These chemicals are the starting points for most polymers and other organic chemicals as

well as much of the specialty chemicals category.

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Other derivatives and basic industrials include synthetic rubber, surfactants, dyes and pigments,

turpentine, resins, carbon black, explosives, and rubber products and contribute about 20 percent

of the basic chemicals' external sales. Inorganic chemicals (about 12 percent of the revenue

output) make up the oldest of the chemical categories. Products include salt, chlorine, caustic

soda, soda ash, acids (such as nitric, phosphoric, and sulfuric), titanium dioxide, and hydrogen

peroxide. Fertilizers are the smallest category (about 6 percent) and include phosphates,

ammonia, and potash chemicals.

Life sciences (about 30 percent of the dollar output of the chemistry business) include

differentiated chemical and biological substances, pharmaceuticals, diagnostics, animal health

products, vitamins, and crop protection chemicals. While much smaller in volume than other

chemical sectors, their products tend to have very high prices—over ten dollars per pound—

growth rates of 1.5 to 6 times GDP, and research and development spending at 15 to 25 percent

of sales. Life science products are usually produced with very high specifications and are closely

scrutinized by government agencies such as the Food and Drug Administration. Crop protection

chemicals, about 10 percent of this category, include herbicides, insecticides, and fungicides.

Specialty chemicals are a category of relatively high valued, rapidly growing chemicals with

diverse end product markets. Typical growth rates are one to three times GDP with prices over a

dollar per pound. They are generally characterized by their innovative aspects. Products are sold

for what they can do rather than for what chemicals they contain. Products include electronic

chemicals, industrial gases, adhesives and sealants as well as coatings, industrial and institutional

cleaning chemicals, and catalysts. Coatings make up about 15 percent of specialty chemicals

sales, with other products ranging from 10 to 13 percent.

Specialty Chemicals are sometimes referred to as "fine chemicals"

Consumer products include direct product sale of chemicals such as soaps, detergents, and

cosmetics. Typical growth rates are 0.8 to 1.0 times GDP.

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Export of chemical from India to U.S.

Every year, the American Chemistry Council tabulates the U.S. production of the top 100 basic

chemicals. In 2000, the aggregate production of the top 100 chemicals totaled 502 million tons,

up from 397 million tons in 1990. Inorganic chemicals tend to be the largest volume, though

much smaller in dollar revenue terms due to their low prices. The top 11 of the 100 chemicals in

2000 were sulfuric acid (44 million tons), nitrogen (34), ethylene (28), oxygen (27), lime (22),

ammonia (17), propylene (16), polyethylene (15), chlorine (13), phosphoric acid (13) and

diammonium phosphates (12).

1.3 Companies

The largest corporate producers worldwide, with plants in numerous countries, are BASF, Dow,

Degussa, Eastman Chemical Company, Shell, Bayer, INEOS, ExxonMobil, DuPont, SABIC,

Braskem and Mitsubishi, along with thousands of smaller firms.

In the U.S. there are 170 major chemical companies. They operate internationally with more than

2,800 facilities outside the U.S. and 1,700 foreign subsidiaries or affiliates operating. The U.S.

chemical output is $400 billion a year. The U.S. industry records large trade surpluses and

employs more than a million people in the United States alone. The chemical industry is also the

second largest consumer of energy in manufacturing and spends over $5 billion annually on

pollution abatement.

In Europe, especially Germany, the chemical, plastics and rubber sectors are among the largest

industrial sectors. Together they generate about 3.2 million jobs in more than 60,000 companies.

Since 2000 the chemical sector alone has represented 2/3 of the entire manufacturing trade

surplus of the EU. The chemical sector accounts for 12% of the EU manufacturing industry's

added value.

The chemical industry has shown rapid growth for more than fifty years. The fastest growing

areas have been in the manufacture of synthetic organic polymers used as plastics, fibres and

elastomers. Historically and presently the chemical industry has been concentrated in three areas

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of the world, Western Europe, North America and Japan (the Triad). The European Community

remains the largest producer area followed by the USA and Japan.

The traditional dominance of chemical production by the Triad countries is being challenged by

changes in feedstock availability and price, labour cost, energy cost, differential rates of

economic growth and environmental pressures. Instrumental in the changing structure of the

global chemical industry has been the growth in China, India, Korea, the Middle East, South East

Asia, Nigeria, and Brazil.

1.4 Technology

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This is a process diagram of a turbine generator. Knowing how to design a sustainable process in

which the system can withstand or manipulate process halting conditions such as; heat, fiction,

pressure, emissions, contaminants, is essential for engineers working to produce a sustainable

process for use in the chemical industry.

As accepted by chemical engineers, the chemical industry involves the use of chemical processes

such as chemical reactions and refining methods to produce a wide variety of solid, liquid, and

gaseous materials. Most of these products are used in manufacture of other items, although a

smaller number are used directly by consumers. Solvents, pesticides, lye, washing soda, and

portland cement are a few examples of product used by consumers. The industry includes

manufacturers of inorganic- and organic-industrial chemicals, ceramic products, petrochemicals,

agrochemicals, polymers and rubber (elastomers), oleochemicals (oils, fats, and waxes),

explosives, fragrances and flavors. Examples of these products are shown in the Table below.

Product Type Examples

inorganic industrial ammonia, nitrogen, sodium hydroxide, sulfuric acid, nitric acid

organic industrial acrylonitrile, phenol, ethylene oxide, urea

ceramic products silica brick, frit

petrochemicals ethylene, propylene, benzene, styrene

agrochemicals fertilizers, insecticides, herbicides

polymers polyethylene, Bakelite, polyester

elastomers polyisoprene, neoprene, polyurethane

oleochemicals lard, soybean oil, stearic acid

explosives nitroglycerin, ammonium nitrate, nitrocellulose

fragrances and flavors benzyl benzoate, coumarin, vanillin

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Although the pharmaceutical industry is often considered a chemical industry , it has many

different characteristics that puts it in a separate category. Other closely related industries include

petroleum, glass, paint, ink, sealant, adhesive, and food processing manufacturers.

Chemical processes such as chemical reactions are used in chemical plants to form new

substances in various types of reaction vessels. In many cases the reactions are conducted in

special corrosion resistant equipment at elevated temperatures and pressures with the use of

catalysts. The products of these reactions are separated using a variety of techniques including

distillation especially fractional distillation, precipitation, crystallization, adsorption, filtration,

sublimation, and drying. The processes and product or products are usually tested during and

after manufacture by dedicated instruments and on-site quality control laboratories to insure safe

operation and to assure that the product will meet required specifications. The products are

packaged and delivered by many methods, including pipelines, tank-cars, and tank-trucks (for

both solids and liquids), cylinders, drums, bottles, and boxes. Chemical companies often have a

research and development laboratory for developing and testing products and processes. These

facilities may include pilot plants, and such research facilities may be located at a site separate

from the production plant(s).

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1.5 TYPES OF CHEMICALS

1.5.1 Organic And Inorganic Chemicals

    The state of development of this particular subsector is evident from the fact that the

indigenous production of caustic soda, a versatile chemical with extensive industrial application,

which was hardly 11,000 tonnes in 1950, has increased to about 1.74 million tonnes now. The

production of soda ash, yet another versatile chemical with varied industrial application as well

as basic washing powder in households, has grown from the level of about 45,000 tonnes in 1950

to over 1 million tonnes at present.

    The manufacture of other chemicals like carbon black, calcium carbide and phosphoric

acid is well established. Self-sufficiency has almost been achieved. The development of the

organic chemical industry, which, in the initial years after Independence, was based on the ethyl

alcohol derived from sugar-cane molasses, is now based largely on feed-stock derived from

petroleum.

    In the dye stuff and dye-intermediates, the country has more than 50 units in the

organised sector with a total installed capacity of over 55,000 tonnes per annum. A large quantity

of dyes and dye intermediates are being exported.

    The pesticides and insecticides sub-sector has, similarly, made impressive progress since

the first factory was set up in the 1950s. As of now, about 60 different grades of technical

pesticides are produced indigenously and converted into formulations by over 500 units. The

production in the country is about 1,00,000 tonnes annually. 

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1.5.1.1 Inorganic Chemicals

US$ 2.5 Billion industry.

Covers basic products like Caustic, Chlorine, Sulphuric Acid etc.

Inorganic chemicals mostly used in detergents, glass, soap, fertiliser, alkalies etc.

Competition from imports are on the rise.

1.5.1.2 Organic Chemicals

1 Billion Dollar industry.

Covers a wide range of chemicals.

Units concentrated mostly in the Western India.  

1.5.2 DRUGS AND PHARMACEUTICALS: 

The Indian Pharmaceutical Industry is the largest in the developing world. The industry

currently produces a wide range of bulk drugs. In fact, India is currently a world leader in

manufacture and export of basic drugs such as ethambutol and ibuprofen.300 bulk drugs &

formulation based on them are manufactured in the country. There are 10,000 manufacturing

units, of which 290 units are in the large-scale sector, 45 Multi-National Companies (MNCs)

have manufacturing bases here. 

1.5.3 PESTICIDES AND AGROCHEMICALS: 

India is currently the largest manufacturer of Pesticides in Asia. Second only to Japan. The

pesticides demand from the agriculture sector is expected to go up to 97,000 tonnes by the year

2000. More than 60 technical grade pesticide is manufactured indigenously. Some 125 units are

engaged in the manufacture of the above and over 500 units are making pesticide formulations.

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In agrochemical, we manufacture significant quantities of synthetic pyrethroids, such as

fenvalerate and cypermethrin, endosulphane, and organophosphate range of agrochemicals,

including monocrotophos. India is also a dominant producer of isoproturon, a weedicide

accounting for nearly 25% of the world-wide production. 

A pesticide is any substance or mixture of substances intended for preventing, destroying,

repelling or mitigating any pest. A pesticide may be a chemical substance, biological agent (such

as a virus or bacterium), antimicrobial, disinfectant or device used against any pest. Pests include

insects, plant pathogens, weeds, molluscs, birds, mammals, fish, nematodes (roundworms), and

microbes that destroy property, spread disease or are a vector for disease or cause a nuisance.

Although there are benefits to the use of pesticides, there are also drawbacks, such as potential

toxicity to humans and other animals. FAO has defined the term of pesticide as:

any substance or mixture of substances intended for preventing, destroying or controlling any

pest, including vectors of human or animal disease, unwanted species of plants or animals

causing harm during or otherwise interfering with the production, processing, storage, transport

or marketing of food, agricultural commodities, wood and wood products or animal feedstuffs, or

substances which may be administered to animals for the control of insects, arachnids or other

pests in or on their bodies. The term includes substances intended for use as a plant growth

regulator, defoliant, desiccant or agent for thining fruit or preventing the premature fall of fruit,

and substances applied to crops either before or after harvest to protect the commodity from

deterioration during storage and transport.

Pesticides are used to control organisms considered harmful. For example, they are used to kill

mosquitoes that can transmit potentially deadly diseases like west nile virus, yellow fever, and

malaria. They can also kill bees, wasps or ants that can cause allergic reactions. Insecticides can

protect animals from illnesses that can be caused by parasites such as fleas. Pesticides can

prevent sickness in humans that could be caused by mouldy food or diseased produce.

Herbicides can be used to clear roadside weeds, trees and brush. They can also kill invasive

weeds that may cause environmental damage. Herbicides are commonly applied in ponds and

lakes to control algae and plants such as water grasses that can interfere with activities like

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swimming and fishing and cause the water to look or smell unpleasant. Uncontrolled pests such

as termites and mould can damage structures such as houses. Pesticides are used in grocery

stores and food storage facilities to manage rodents and insects that infest food such as grain.

Each use of a pesticide carries some associated risk. Proper pesticide use decreases these

associated risks to a level deemed acceptable by pesticide regulatory agencies such as the United

States Environmental Protection Agency (EPA) and the Pest Management Regulatory Agency

(PMRA) of Canada.

Pesticides can save farmers' money by preventing crop losses to insects and other pests; in the

U.S., farmers get an estimated fourfold return on money they spend on pesticides. One study

found that not using pesticides reduced crop yields by about 10%. Another study,conducted in

1999, found that a ban on pesticides in the United States may result in a rise of food prices, loss

of jobs, and an increase in world hunger.

DDT, sprayed on the walls of houses, is an organochloride that has been used to fight malaria

since the 1950s. Recent policy statements by the World Health Organization have given stronger

support to this approach. Dr. Arata Kochi, WHO's malaria chief, said, "One of the best tools we

have against malaria is indoor residual house spraying. Of the dozen insecticides WHO has

approved as safe for house spraying, the most effective is DDT." [19] However, since then, an

October 2007 study has linked breast cancer from exposure to DDT prior to puberty. Poisoning

may also occur due to use of DDT and other chlorinated hydrocarbons by entering the human

food chain when animal tissues are affected. Symptoms include nervous excitement, tremors,

convulsions or death. Scientists estimate that DDT and other chemicals in the organophosphate

class of pesticides have saved 7 million human lives since 1945 by preventing the transmission

of diseases such as malaria, bubonic plague, sleeping sickness, and typhus. However, DDT use is

not always effective, as resistance to DDT was identified in Africa as early as 1955, and by 1972

nineteen species of mosquito worldwide were resistant to DDT. A study for the World Health

Organization in 2000 from Vietnam established that non-DDT malaria controls were

significantly more effective than DDT use. The ecological effect of DDT on organisms is an

example of bioaccumulation.

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Agrochemical (or agrichemical), a contraction of agricultural chemical, is a generic term for

the various chemical products used in agriculture. In most cases, agrichemical refers to the broad

range of pesticides, including insecticides, herbicides, and fungicides. It may also include

synthetic fertilizers, hormones and other chemical growth agents, and concentrated stores of raw

animal manure.

Many agrichemicals are toxic, and agrichemicals in bulk storage may pose significant

environmental and/or health risks, particularly in the event of accidental spills. In many

countries, use of agrichemicals is highly regulated. Government-issued permits for purchase and

use of approved agrichemicals may be required. Significant penalties can result from misuse,

including improper storage resulting in spillage. On farms, proper storage facilities and labeling,

emergency clean-up equipment and procedures, and safety equipment and procedures for

handling, application and disposal are often subject to mandatory standards and regulations.

Usually, the regulations are carried out through the registration process.

According to Agrow, Bayer CropScience led the agrichemical industry in sales in 2007.

Syngenta was second, followed by BASF, Dow Agrosciences, Monsanto, and DuPont.

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1.5.4 PETROCHEMICALS: 

The petrochemical industry of India is less than 40 years old. The sector has a significant

growth potential. Although the current per capita consumption of petrochemicals products is low,

the demand for the same is growing : 10% during the Sixth Plan, 13.2% during the Seventh Plan,

25% expected during the Eight Plan.

In contrast, during the last seven years or so, the consumption of polymers and plastics

increased by more than a million tonnes. Neverthless, India’s per capita consumption of plastics

is around 2 kilograms which is far less than the consumption levels of about 17 kilograms of the

developed world and even less than the per capita consumption of 6 kilograms in Latin America

and about 8 kilograms in China.

    Petrochemicals are no longer considered an elitist material. They serve to effect cost and

energy saving. What is more, they find wide application in the domestic and industrial sectors.

Synthetic fibres play a critical role in supplementing natural fibres such as cotton and wool to

cater to the clothing needs of India’s vast population. Synthetic rubber supplements natural

rubber. Engineering plastics have substituted scarce metals.

    It is, however, in plastics that the revolution is on a grand scale. With their

versatile applications, plastics are in every home, office and public place. Metal buckets are now

replaced by light weight, multi-colour, better-looking products, glass milk bottles have been

replaced by cheaper and easily manageable pouches, wooden crates for cold drinks have been

substituted by plastic crates and wood and steel chairs have given way to chairs made of

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polypropylene. The list could go on. The crux is that plastics are and will remain an integral part

of human existence.

Petrochemicals are chemical products derived from petroleum. Some chemical compounds made

from petroleum are also obtained from other fossil fuels such as coal or natural gas, or renewable

sources such as corn or sugar cane.

This article focuses on organic compounds that are not burned as fuel Two petrochemical classes

are olefins including ethylene and propylene, and aromatics including benzene, toluene and

xylene isomers. Oil refineries produce olefins and aromatics by fluid catalytic cracking of

petroleum fractions. Chemical plants produce olefins by steam cracking of natural gas liquids

like ethane and propane. Aromatics are produced by catalytic reforming of naphtha. Olefins and

aromatics are the building blocks for a wide range of materials such as solvents, detergents, and

adhesives. Olefins are the basis for polymers and oligomers used in plastics, resins, fibers,

elastomers, lubricants, and gels.

Global ethylene and propylene production are ~110 million tonnes and ~65 million tonnes per

annum respectively. Aromatics production is ~70 million tonnes. The largest petrochemical

industries are located in the USA and Western Europe; however, major growth in new

production capacity is in the Middle East and Asia. There is substantial inter-regional

petrochemical trade.

Primary petrochemicals are divided into three groups depending on their chemical structure:

Olefins includes ethylene, propylene, and butadiene. Ethylene and propylene are

important sources of industrial chemicals and plastics products. Butadiene is used in

making synthetic rubber.

Aromatics includes benzene, toluene, and xylenes. Benzene is a raw material for dyes and

synthetic detergents, and benzene and toluene for isocyanates MDI and TDI used in

making polyurethanes. Manufacturers use xylenes are used to produce plastics and

synthetic fibers.

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Synthesis gas is a mixture of carbon monoxide and hydrogen used to make ammonia and

methanol. Ammonia is used to make the fertilizer urea and methanol is used as a solvent

and chemical intermediate.

1.5.4.1 Petrochemicals products

Petrochemicals Polymers & Fibers Petroleum Chemicals Healthcare

Basic Feedstock

Butadiene

Ethylene

Para-xylene

Propylene

Intermediates

2-Ethylhexanol (2-EH)

Acetic acid

Acrylonitrile (AN)

Ammonia

Bis(2-ethylhexyl)

phthalate (dioctyl

phthalate)

n-Butene

Cyclohexane

Dimethyl terephthalate

(DMT)

Dodecylbenzene

Acrylic fiber

Acrylonitrile

butadiene styrene

(ABS)

Acrylonitrile styrene

(AS)

Polybutadiene (PBR)

Polyvinyl chloride

(PVC)

Polyethylene (PE)

Polyethylene

terephthalate (PET)

Polyol

Polypropylene (PP)

Polystyrene (PS)

Styrene butadiene

(SBR)

Urea-formaldehyde

(UF)

Lubricants

Additives

Catalysts

Marine fuel

oil

Petroleum

refining

Adhesives and

sealants

Agrochemicals

Construction

chemicals

Corrosion control

chemicals

Cosmetics raw

materials

Electronic chemicals

and materials

Flavourings,

fragrances, food

additives

Specialty and

industrial chemicals

Specialty and

industrial gases

Inks, dyes and

Health care

Pharmaceutical

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Ethanol

Ethanolamine

Ethoxylate

1,2-Dichloroethane

(ethylene dichloride or

EDC)

Ethylene glycol (EG)

Ethylene oxide (EO)

Formaldehyde

n-Hexene

Linear alkylbenzene

(LAB)

Methanol

Methyl tert-butyl ether

(MTBE)

Phenol

Propylene oxide]]

Purified terephthalic acid

(PTA)

Styrene monomer (SM)

Urea

Vinyl acetate monomer

(VAM)

Vinyl chloride monomer

(VCM)

printing supplies

Packaging, bottles,

and containers

Paint, coatings, and

resins

Polymer additives

Specialty and life

sciences chemicals

Surfactants and

cleaning agents

1.5.4.2 SEGMENT HIGHLIGHTS:

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The major category in the chemicals

One of the fastest sectors at 13% p.a.

Covers:

o Basic chemicals like Ethylene, Propylene, Benzene and Xylene etc.

o Intermediates like MEG, PAN and LAB etc.

o Synthetic fibres like Nylon, PSF and PFY etc.

o Polymers like LDPE/HDPE, PVC, Polyester and PET etc.

o Synthetic rubber like SBR, PBR etc.

Major players are Reliance, IPCL, NOCIL, Haldia and GAIL etc.

1.5.4.3 PETROCHEMICAL MAJOR PLAYERS:

Reliance Industries Ltd. - 750,000 TPA Ethylene - 400,000 TPA Propylene - 27,000,000 TPA refinery

IPCL Baroda - 300,000 TPA

Nagothane - 300,000 TPA

Gandhar - 400,000 TPA

Haldia Petrochem - 420,000 TPA Ethylene- 200,000 TPA Propylene

GAIL - 300,000 TPA Ethylene

NOCIL -150,000 TPA

1.5.5 DYES AND PIGMENTS: 

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A dye can generally be described as a colored substance that has an affinity to the substrate to

which it is being applied. The dye is generally applied in an aqueous solution, and may require a

mordant to improve the fastness of the dye on the fiber.

Both dyes and pigments appear to be colored because they absorb some wavelengths of light

preferentially. In contrast with a dye, a pigment generally is insoluble, and has no affinity for the

substrate. Some dyes can be precipitated with an inert salt to produce a lake pigment, and based

on the salt used they could be aluminum lake, calcium lake or barium lake pigments.

Dyed flax fibers have been found in the Republic of Georgia dated back in a prehistoric cave to

36,000 BP.[1][2] Archaeological evidence shows that, particularly in India and Phoenicia, dyeing

has been extensively carried out for over 5000 years. The dyes were obtained from animal,

vegetable or mineral origin, with no or very little processing. By far the greatest source of dyes

has been from the plant kingdom, notably roots, berries, bark, leaves and wood, but only a few

have ever been used on a commercial scale.

A pigment is a material that changes the color of reflected or transmitted light as the result of

wavelength-selective absorption. This physical process differs from fluorescence,

phosphorescence, and other forms of luminescence, in which a material emits light.

Many materials selectively absorb certain wavelengths of light. Materials that humans have

chosen and developed for use as pigments usually have special properties that make them ideal

for coloring other materials. A pigment must have a high tinting strength relative to the materials

it colors. It must be stable in solid form at ambient temperatures.

For industrial applications, as well as in the arts, permanence and stability are desirable

properties. Pigments that are not permanent are called fugitive. Fugitive pigments fade over time,

or with exposure to light, while some eventually blacken.

Pigments are used for coloring paint, ink, plastic, fabric, cosmetics, food and other materials.

Most pigments used in manufacturing and the visual arts are dry colourants, usually ground into

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a fine powder. This powder is added to a vehicle (or binder), a relatively neutral or colorless

material that suspends the pigment and gives the paint its adhesion.

The worldwide market for inorganic, organic and special pigments had a total volume of around

7.4 million tons in 2006. Asia has the highest rate on a quantity basis followed by Europe and

North America. In 2006, a turnover of 17.6 billion US$ (13 billion euro) was reached mostly in

Europe, followed by North America and Asia.

A distinction is usually made between a pigment, which is insoluble in the vehicle (resulting in a

suspension), and a dye, which either is itself a liquid or is soluble in its vehicle (resulting in a

solution). The term biological pigment is used for all colored substances independent of their

solubility. A colorant can be both a pigment and a dye depending on the vehicle it is used in. In

some cases, a pigment can be manufactured from a dye by precipitating a soluble dye with a

metallic salt. The resulting pigment is called a lake pigment.

There are about 50 units in the organised sector and about 900 units in the small scale

sector.

The Installed Capacity:

37,000 MTA Organised Sector 

10,000 MTA Small Scale Sector 

Nearly 80% of the dyes manufactured is utilised by the textile industry, with the balance

going to into paints, printing inks, rubber & leather. 

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1.5.6 FINE AND SPECIALITY CHEMICALS: 

70% of the Fine Chemicals produced in India find their way into the Pharmaceutical and

Agrochemical sectors. Performance chemicals geared to customer need are being developed

locally particularly since there is growing demand for Speciality chemicals like Sunscreens,

Antioxidants, Biocides, etc.

Manufacturers of Fine Chemicals and specialities have major strengths in basic research

facilities available with CSIR laboratories such as NCL, IICT & RRls as also corporate R & D

centres. This ensures that development of process know-how; plant process design and

engineers, detailed engineering design, commissioning assistance and even consultancy for re-

engineering are available at low cost. 

1.5.6.1 SEGMENT HIGHLIGHTS:

Low volume, high price/margin chemicals

Fragmented with large number of players

Major Players

o India: ION Exchange, Balmer Lawrie, Dai Ichi Karkaria. etc.

o MNC: Ciba, Hoechst, Foseco, Nalco Chemicals, Clariant, ICI etc.

o And many small Indian companies

Market around US$ 80 million p.a.

Major end user segments - Textile, Leather, paper, detergent, rubber, paints, polyester, oil

and gas etc.

Growing very fast

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1.5.7 FERTILIZERS: 

Fertilizers are soil amendments applied to promote plant growth; the main nutrients present in

fertilizer are nitrogen, phosphorus, and potassium (the 'macronutrients') and other nutrients

('micronutrients') are added in smaller amounts. Fertilizers are usually directly applied to soil,

and also sprayed on leaves ('foliar feeding').

Fertilizers are roughly broken up between organic and inorganic fertilizer, with the main

difference between the two being sourcing, and not necessarily differences in nutrient content.

Organic fertilizers and some mined inorganic fertilizers have been used for many centuries,

whereas chemically synthesized inorganic fertilizers were only widely developed during the

industrial revolution. Increased understanding and use of fertilizers were important parts of the

pre-industrial British Agricultural Revolution and the industrial green revolution of the 20th

century.

Fertilizers typically provide, in varying proportions:

the three primary macronutrients: nitrogen (N), phosphorus (P), and potassium (K).

the three secondary macronutrients: calcium (Ca), sulfur (S), magnesium (Mg).

and the micronutrients or trace minerals: boron (B), chlorine (Cl), manganese (Mn), iron

(Fe), zinc (Zn), copper (Cu), molybdenum (Mo) and selenium (Se).

The macronutrients are consumed in larger quantities and are present in plant tissue in quantities

from 0.2% to 4.0% (on a dry matter weight basis). Micronutrients are consumed in smaller

quantities and are present in plant tissue in quantities measured in parts per million (ppm),

ranging from 5 to 200 ppm, or less than 0.02% dry weight.

The Indian fertilizer industry has emerged as the fourth largest producer of fertilizers in

the world after China, USA, Russia. Nitrogenous and phosphatic fertilizers are produced

indigenously, while requests for potassic fertilizers are met through imports.

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India has achieved near self-sufficiency in the inputs for the production of nitrogenous

fertilizers, but for the production of phosphatic fertilizers, the country continues to rely on

imports of raw materials (rock phosphate and sulphur and for intermediates such as phosphoric

acid). 

1.5.7.1 SEGMENT HIGHLIGHTS:

India is a large agricultural economy which is the major user. Average Indian

consumption is very low (1/20th of world average)

Market size 100,000 MT (in terms of technical grade)

o US$ 800 million

o Growth 10% pa

Consumption varies depending on crop and region

Cash crops like sugarcane, tobacco etc. are the major consumers of pesticides (above

60%)

Two types of producers - Technical - 40 nos.

o Formulators - above 500 nos.

Major players

o India: United Phosphorus, Rallis and Excel

o MNC: Hoechst Agrevo, Novartis, Bayer etc

Significant exports

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1.6 EFFECT OF GLOBAL SLOWDOWN

Global economic meltdown has ripple effects on each sector of the Industry. Apart from

Financial, banking and interest rate sensitive sectors, other sectors are also in the grip of the

recessionary pressure. Among them, Chemical is one of the worst hit sector. Drastic fall in the

prices, slump in the export orders and substantial demand slowdown in domestic market have

forced the Chemical Industries to cut expansion plans and shutdown the plants till the situation

improves.

1.6.1 HEAVY FALL IN THE PRICES

Over the last 3 months, chemical prices have tumbled sharply in global markets, which

have led to heavy fall in Indian Market also. Fall in raw material prices resulted into decline in

finished products prices. As crude oil prices have fallen from $147 per barrel in mid-July to $ 40-

45 at present, all chemicals, solvents, polymers and petrochemicals have also fallen by that

extent. Currently prices of many chemicals are prevailing at level of 2002-03. The prices of

sulfuric acid prices have come down from 13,000 a tonnes to Rs. 200 a tonnes. Similarly, sulfur

prices have dipped to Rs. 44 a kg to Rs. 4 a kg within last couple of months. There has been 33%

to 50 % price fall in various chemical prices.

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Fall in Prices in Last 3 monthsChemicals % Decrease

Sulphuric Acid 98

Sulphur 91

Chlorosulphonic Acid 84

Sodium nitrite 82

Anniline 70

Acetic Acid 51

H Acid 47

Vinyl Sulfone 35

Benezene 34

DEG 42

Plasticiser 40

Ortho zylene 70

1.6.2 DROP IN EXPORTS

Global slowdown has severely affected exports of Chemicals from India to US, Europe

and other markets. Considering substantial drop in chemicals prices and liquidity crunch,

chemical importers are demanding heavy discounts from chemical exporters, which has led to

cancellation of many orders apart from blockage of chemical consignment from India. Buyers

from overseas markets are refusing to take the delivery of chemicals dispatched by Indian

exporters. Foreign buyers are also demanding 25 to 30 % discounts. Discounts have been sought

even in case where material has already been shipped from India.

The Chemical exporters were expecting recovery in demand post- Olympic, which has

not happened. To survive in this time, some producers have started to convert EoU (Export

Oriented Unit) into unit which can sell goods in domestic area (DTA).

Apart from slowdown, policy measures related to environment concern also affecting the

exports. European Union (EU) has tightened the import rules for chemicals. Market access for

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chemical exports to the European Union (EU) may become limited. The new chemical policy of

EU is aimed at ensuring protection from risks that chemicals may pose to human health and the

environment through generation and dissemination of information on chemicals. As per the new

policy, compliance would require exporters to conduct extensive tests to generate data, which

will result in extra cost and lower margins.

1.6.3 PRODUCTION CUTS

A demand slowdown and credit squeeze has lead to lower off-take of the chemicals

across the industry including organic, inorganic, petrochem and polymers even as prices have

fallen dramatically in last three months. As demand for homes, offices and cars declined which

resulted in decrease demand of chemicals from Automobile makers, Construction companies and

also from Textile manufacturers. It has also resulted in many Asian refineries running at an

average of about 80% capacities and further production cuts are expected. Indian chemical

manufacturers and refineries are also facing similar problems. Lower utilisation of refining

capacities and cases shutting down plants in the name of maintenance are frequent. The

perception of a further slowdown and fears of further fall in prices have resulted in lower

inventories or running production capacities with minimum stocks.

Reliance Industries (RIL) has closed five of its seven polyester and petrochemical units

at Patalganga. The company has shut down plants for manufacturing polyester filament

yarn (PFY), polyester staple fibre (PSF), paraxylene (PX), purified terephthalic acid

(PTA) and linear alkyl benzene (LAB). However, it is yet to close down the second units

of PSF and PFY.

Reliance Industries has also suspended operation of four units at the Vadodara

petrochemicals facility (formerly IPCL complex) in Gujarat. It stopped operations of

Acrylic fibre (24,000 tonnes per annum), acrylo nitrile (43,000 tpa), PVC (55,000 tpa)

and LAB (linear Alkyl benzene, 45,000 tpa) plants in the complex.

Asian Paints, India’s biggest paint producer, has temporarily closed the company’s

chemical plant for a period from a week to a month.

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1.7 COUNTRY PROFILE : USA

The USA is the world's foremost economic and military power, with global interests and

an unmatched global reach. America's gross domestic product accounts for close to a quarter of

the world total, and its military budget is reckoned to be almost as much as the rest of the world's

defence spending put together.

1.7.1 FACTS:

Full name: United States of America

Population: 308.8 million (UN, 2007)

Capital: Washington DC

Largest city: New York City

Area: 9.8 million sq km (3.8 million sq miles)

Major language: English

Major religion: Christianity

Life expectancy: 76 years (men), 81 years (women) (UN)

Monetary unit: 1 US dollar = 100 cents

Main exports: Computers and electrical machinery, vehicles, chemical products, food

and live animals, military equipment and aircraft

GNI per capita: US $46,040 (World Bank, 2007)

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COUNTRY PROFILE

1.7.2 INDIA

1.7.2.1 OFFICIAL NAME: Republic of India

1.7.2.2 CAPITAL: New Delhi

1.7.2.3 SYSTEM OF GOVERNMENT: Multiparty Federal Republic

1.7.2.4 AREA: 3,166,692 Sq Km (1,222,720 Sq Mi)

1.7.2.5 ESTIMATED 2000 POPULATION 1,096,695,000

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1.7.2.6 LOCATION & GEOGRAPHY: India is located on the Indian sub-continent in South

Asia. It is bound by Pakistan to the northwest, China, Bhutan and Nepal to the north, Myanmar

and Bangladesh to the east, the Bay of Bengal to the southeast and the Arabian Sea to the

southwest. It is the second largest country in Asia and the territory also includes the Andaman,

Nicobar and the Lakshadweep Islands. The mainland of India can be divided into four

topographical regions. (1.) The northern mountains or Himalayan region which comprises three

parallel ranges mixed with large plateaux and valleys. (2.) The Indo-Gangetic Plain which is

formed by the basins of the Ganges, Indus and Brahmaputra Rivers. (3.) The desert region which

is divided into the Great and Little Deserts. (4.) The southern region which includes a narrow

coastal plain along the Arabian Sea and a broader one along the Bay of Bengal. The southern

region is separated from the Indo-Gangetic Plain by a mass of mountain ranges and plateaux on

the Indian or Deccan Peninsula, which are flanked by the Western and Eastern Ghats. The rivers

of India are generally divided into the Himalayan and peninsula rivers, and the principal rivers

include the Ganges with its tributaries, the Jumna, Yamuna, Ghaghra, Gandak, Kosi, Chambi,

Betwa, Son, Mahanadi, Godavari, Krishna, Cauvery, Narbada and Tapti. Major Cities (pop. est.);

Mumbai (Bombay) 9,925,900, Delhi 7,206,700, Calcutta 4,399,800, Madras 3,841,400,

Bangalore 3,302,300, Hyderabad 3,145,900, Ahmadabad 2,954,500, Kanpur 1,879,400, Nagpur

1,624,800, Lucknow 1,619,100, Pune 1,566,700, New Delhi 301,300 (1991). Land Use; forested

23%, pastures 4%, agricultural-cultivated 57%, other 16% (1993).

1.7.2.7 CLIMATE: India has a tropical climate that is dominated by the Asiatic monsoons with

four fairly distinct seasons which are common to all six or seven climatic regions. (1.) A

relatively cool winter monsoon season. (2.) A hot and rainless transitional season. (3.) A rainy

monsoon season and (4.) a humid season. Tropical hurricanes and cyclones are common between

April to June and September to December. Average temperature ranges in New Delhi are from 7

to 21 degrees Celsius (45 to 70 degrees Fahrenheit) in January to 26 to 41 degrees Celsius (79 to

106 degrees Fahrenheit) in May.

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1.7.2.8 PEOPLE: India's racial diversity is extremely complex, but generally can be divided into

the following ethnic groups. The Indo-Aryan who represent 72% of the population while the

Dravidian account for 25% and the Mongoloid with others account for 3%. There are also three

alien ethnic groups which include the Parsis, Jews and the Anglo-Indians of mixed European and

Indian descent.

1.7.2.9 DEMOGRAPHIC/VITAL STATISTICS: Density; 275 persons per sq km (712

persons per sq mi) (1991). Urban-Rural; 25.7% urban, 74.3% rural (1991). Sex Distribution;

51.9% male, 48.1% female (1991). Life Expectancy at Birth; 58.1 years male, 59.1 years female

(1986-90). Age Breakdown; 37% under 15, 27% 15 to 29, 18% 30 to 44, 11% 45 to 59, 6% 60 to

74, 1% 75 and over (1990). Birth Rate; 32.5 per 1,000 (1991). Death Rate; 11.4 per 1,000

(1991). Increase Rate; 21.1 per 1,000 (1991). Infant Mortality Rate; 80.0 per 1,000 live births

(1990).

1.7.2.10 RELIGIONS: Around 83% of the population are Hindu, 11.4% are Muslim, 3% are

Christian, 2% are Sikh while just under 1% are Buddhist and .5% are Jain.

1.7.2.11 LANGUAGES: The official languages are Hindi and English, with Hindi including its

associated languages and dialects accounting for 84% of the population while English is used for

national, political and commerce purposes. Over 1,600 languages and dialects are spoken

throughout India with over 15 constitutionally recognized.

1.7.2.12 EDUCATION: Aged 25 or over and having attained: no formal schooling 65.8%,

incomplete primary 7.1%, primary 10.9%, incomplete secondary 6.2%, secondary 7.1%, higher

2.9% (1981). Literacy; literate population aged 15 or over 261,200,000 or 48.2% (1990).

1.7.2.13 MODERN HISTORY - WWII TO 1993: On Aug. 15, 1947 India gained

independence from Britain and the next day Pakistan was created while Jawaharlal Nehru

became India's first Prime Minister. From 1948 to 1949 India and Pakistan fought over Kashmir

which ended when the UN divided the Kashmir between the two countries. In 1948 Mohandas

Gandhi who led India to independence was assassinated. In 1950 India adopted a new

constitution which made it a republic. In 1962 a border dispute erupted with China, in which

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China invaded the northeastern border section of India. In May 1964 Prime Minister Nehru died

after being at the forefront of Indian politics since its independence. In 1965 a second war broke

out between India and Pakistan over Kashmir which resulted in Soviet mediation and a peace

agreement in Jan. 1966. In Mar. 1971 Indira Gandhi, became India's first woman Prime Minister.

In Dec. 1971 India assisted East Pakistan in a war against West Pakistan which resulted in East

Pakistan becoming the independent nation of Bangladesh. In 1977 Prime Minister Indira Gandhi

and her party were defeated in parliamentary elections, however, in 1980 she won the elections

and became Prime Minister again. In 1983 serious unrest developed with the Sikhs wanting more

regional autonomy for Punjab state and in 1984 the Indian Army launched a massive offensive

and as many as 1,000 people were killed in the two day battle. On Oct. 31, 1984 two Sikh

bodyguards assassinated Indira Gandhi and Rajiv Gandhi her son, succeeded her as Prime

Minister in December after parliamentary elections. In July 1985 Rajiv Gandhi signed a peace

accord with the Sikh leader, however, the violence continued and in May 1987 the Punjab state

government was dismissed and the state was placed under central control. Additionally, since

1983 there has been a Sri Lankan Tamil separatist insurgence and in 1987 under an agreement

with the Sri Lankan government India occupied the northern regions of the island. On Mar. 6,

1991 Prime Minister Chandra Shekar resigned and Pres. Ramaswamy Venkataraman dissolved

the lower house of Parliament on Mar. 13, 1991. The elections were set for May 20, 23 and 26,

1991, and were a three way contest between the Indian National Congress (I), the Bharatiya

Janata Party (BJP) and a National Front and leftist parties combination. On May 21, 1991 Rajiv

Gandhi was assassinated by the Tamil "Tiger" guerrilla group in a human bomb attack that also

killed 14 others while he was preparing to give a campaign address in Sriperumbudur. Elections

due for May 23 and 26 were postponed until June 12 and 15, and resulted in the Congress (I)

forming another government and Pamulaparti Venkata Narasihma Rao being sworn in as Prime

Minister on June 21, 1991. On Sept. 24, 1991 the government announced its intention to adopt

the Mandal Commission's recommendation that 27% of public jobs be reserved for "socially and

educationally backward classes". On Oct. 20, 1991 a massive earthquake in the Himalayan

region of Uttar Pradesh killed some 1,600 people while during 1991 there was an insurgence in

violence and assassinations from militant groups in Punjab, Jammu and Kashmir, and Assam that

climaxed on Dec. 26, 1991 with Sikh separatists killing 49 Hindu passengers and wounding a

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further 20 on a train in Punjab. In Jan. 1992 some 91 Bombay slum dwellers lost their lives after

drinking impurely mixed alcohol during New Years celebrations while in May 1992 some 210

also lost their lives in Orissa through similar circumstances. In Feb. 1992 some 47 people died as

a result of a stampede during the ritual bathing in Kumbakonam. In April 1992 a massive stock

swindle known as the scam where a group of bankers and brokers collaborated to manipulate

stock market operations resulted in the arrest of prominent brokers and the executives of several

foreign and Indian banks and institutions. On July 25, 1992 Pres. R. Venkataraman was

succeeded by Shankar Dayal Sharma after presidential elections. During 1992 separatist militant

activities continued in the regions of Punjab, Jammu and Kashmir and Telingana region. On Dec.

6, 1992 Hindu-Muslim riots erupted throughout the country after the demolition of the Muslim

Babri Mosque in Ayodhya by Hindu militants and thousands of supporters. The Hindus had

claimed the site was the birthplace of Lord Rama and that they were going to build their own

temple. On the same day and in response the government dismissed the BJP-run state

government of Uttar Pradesh and imposed direct Presidential rule on the state while on Dec. 7,

1992 Hindu and Muslim fundamentalist parties were outlawed. On Dec. 8, 1992 the BJP leaders

were arrested and on Dec. 15, 1992 other BJP-run state governments were dismissed. By Dec.

12, 1992 the death toll from the religious clashes had climbed to 1,150. On Jan. 6, 1993 Hindu-

Muslim riots broke out in Bombay claiming some 560 lives in the first week. On Jan. 7, 1993

Pres. Sharma issued a ordinance, that was later ratified by the Parliament, to acquire 67.7 acres

(27.4 hectares) around the temple site and the intention to construct two temples on the site, one

for the Muslims and the other for the Hindus. On Jan. 10, 1993 the BJP leaders arrested in Dec.

1992 were released. In March and April, 1993 there were politically motivated bombings in

Calcutta and Bombay with 60 and 33 people respectively losing their lives. During 1993 the

government established a human rights commission to investigate claims of violations and abuse

at the hands of police and security forces while clashes between the government forces and the

various militant separatists continued throughout the year. Also in 1993 the government

appointed a joint parliamentary committee to investigate the 1992 stock market scandal, which

had allegedly lost Rs 40,242,000,000 and the country also experienced its worst earthquake in 50

years in the Maharashtra state on Sept. 20, 1993 with some 10,000 people officially losing their

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lives, although unofficial reports claimed the death toll to be as high as 35,000 with some

140,000 rendered homeless.

1.7.2.14 CURRENCY: The official currency is the Rupee (Re) divided into 100 Paisa.

1.7.2.15 ECONOMY: Gross National Product; USD $262,810,000,000 (1993). Public Debt;

USD $80,985,000,000 (1993). Imports; Re 728,060,000,000 (1994). Exports; Re

695,470,000,000 (1994). Tourism Receipts; USD $1,487,000,000 (1993). Balance of Trade; Re

38,134,000,000 (1994). Economically Active Population; 314,131,370 or 37.5% of total

population (1991). Unemployed; 13.1% (1990).

1.7.2.16 MAIN TRADING PARTNERS: Its main trading partners are the USA, the UK, the

former USSR, Japan, Iran and Iraq.

1.7.2.17 MAIN PRIMARY PRODUCTS: Barley, Bauxite, Chromium, Coal, Cotton, Copper,

Fruit, Gemstones, Ground Nuts, Iron Ore, Jute, Limestone, Manganese, Mica, Millet, Oil and

Gas, Potatoes, Pulses, Rice, Sorghum, Sugar Cane, Tea, Vegetables, Wheat.

1.7.2.18 MAJOR INDUSTRIES: Agriculture, Beverages, Cement, Chemicals, Coke,

Fertilizers, Food Processing, Iron and Steel, Machinery, Oil Refining, Software Development,

Textiles, Transport Equipment.

1.7.2.19 MAIN EXPORTS: Fish, Food, Gemstones, Handicrafts, Iron Ore, Leather, Machinery,

Software, Tea, Textiles.

1.7.2.20 TRANSPORT: Railroads; route length 61,975 km (38,509 mi) (1990), passenger-km

284,800,000,000 (176,966,000,000 passenger-mi) (1990), cargo ton-km 233,900,000,000

(160,198,000,000 short ton-mi) (1990). Roads; length 2,000,000 km (1,242,742 mi) (1989).

Vehicles; cars 2,284,000 (1989), trucks and buses 1,433,000 (1989). Merchant Marine; vessels

855 (1990), deadweight tonnage 10,497,191 (1990). Air Transport; passenger-km

16,518,000,000 (10,264,000,000 passenger-mi) (1990), cargo ton-km 662,832,000 (453,974,000

short ton-mi) (1990).

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1.7.2.21 COMMUNICATIONS: Daily Newspapers; total of 3,805 with a total circulation of

18,800,000 (1993). Radio; receivers 65,000,000 (1994). Television; receivers 20,000,000 (1994).

Telephones; units 8,037,400 (1993).

1.7.2.22 MILITARY: 1,145,000 (1992) total active duty personnel with 85.6% army, 4.8% navy

and 9.6% air force while military expenditure accounts for 3.3% (1993) of the Gross National

Product (GNP).

1.8 TRADE RELATION WITH US:

The United States is India's largest trading partner. In 2007, the United States exported

$17.24 billion worth goods to India and imported $24.02 billion worth of Indian goods. Major

items exported by India to the U.S. include Information Technology Services, textiles,

machinery, ITeS, gems and diamonds, chemicals, iron and steel products, coffee, tea, and other

edible food products. Major American items imported by India include aircraft, fertilizers,

computer hardware, scrap metal and medical equipment. The United States is also India's largest

investment partner, with American direct investment of $9 billion accounting for 9% of total

foreign investment into India. Americans have made notable foreign investment in India's power

generation, telecommunications, ports, roads, petroleum exploration/processing, and mining

industries.

Below are the percentages of traded items India to US increased by 21.12% to $6.94

billion.

Diamonds & precious stones (25%)

Textiles (29.01%)

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Export of chemical from India to U.S.

Iron & Steel (5.81%)

Organic chemicals (4.3%)

Machinery (4.6%)

Electrical Machinery (4.28%)

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Export of chemical from India to U.S.

2.EXPORT PERFORMANCE

2.1 MAJOR IMPORTERS OF ORGANIC CHEMICALS:

Major importers of organic chemicals from India are USA, China, Indonesia, Germany,

Pakistan, Singapore, Spain, Netherland etc.

HS CODES - CHEMICAL PRODUCTS

Code 28 - Inorganic chemicals; organic or inorganic compounds of precious metals, of

rare-earth metals, of radioactive elements or of isotopes

Code 29 - Organic chemicals

Code 30 - Pharmaceutical products

Code 31 - Fertilizers Code

Code 32 - Tanning or dyeing extracts; tannins & derivatives; dyes, pigments & coloring

matter; paint & varnish; putty & other mastics; inks

Code 33 - Essential oils and resinoids; perfumery, cosmetic or toilet preparations

Code 34 - Soap; waxes; polish; candles; modelling pastes; dental preparations with

basis of plaster

Code 35 - Albuminoidal substances; modified starch; glues; enzymes

Code 36 - Explosives; pyrotechnic products; matches; pyrophoric alloys;certain

combustible preparations

Code 37 - Photographic or cinematographic goods

Code 38 - Miscellaneous chemical products

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Export of chemical from India to U.S.

2.2 EXPORT OF INORGANIC CHEMICALS TO USA

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

1. Values in US$ Million 18.06 22.70 30.99 38.16 53.68

2. %Growth   25.69 36.51 23.13 40.68

3. Total export of commodity

424.09 639.11 774.87 801.29 824.21

4. %Growth   50.70 21.24 3.41 2.86

5. %Share of country (1 of 3)

4.26 3.55 4.00 4.76 6.51

6. Total export to country 11,490.03 13,765.75 17,353.06 18,851.42 20,722.17

7. %Growth   19.81 26.06 8.63 9.92

8. %Share of commodity (1 of 6)

0.16 0.16 0.18 0.20 0.26

 Exchange rate: (1US$ = Rs.)

45.9516 44.9315 44.2735 45.2849 40.2410

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Export of chemical from India to U.S.

2.3 EXPORT OF ORGANIC CHEMICALS TO USA

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

1. Values in US$ Million 329.29 389.52 550.49 666.31 778.79

2. %Growth   18.29 41.32 21.04 16.88

3. Total export of commodity

2,823.53 3,620.49 4,857.09 5,730.31 7,174.22

4. %Growth   28.23 34.16 17.98 25.20

5. %Share of country (1 of 3)

11.66 10.76 11.33 11.63 10.86

6. Total export to country 11,490.03 13,765.75 17,353.06 18,851.42 20,722.17

7. %Growth   19.81 26.06 8.63 9.92

8. %Share of commodity (1 of 6)

2.87 2.83 3.17 3.53 3.76

 Exchange rate: (1US$ = Rs.)

45.9516 44.9315 44.2735 45.2849 40.2410

3 TREND ANALYSIS

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Export of chemical from India to U.S.

3.1 EXPORT OF INORGANIC CHEMICALS FROM INDIA (Value in US $ mn.)

YEAR VALUE TREND VALUE

2003-04 424.09 500.23

2004-05 639.11 596.47

2005-06 774.87 692.71

2006-07 801.29 788.96

2007-08 824.21 885.20

2008-09 - 981.44

2009-10 - 1077.68

2010-11 - 1173.92

2011-12 - 1270.17

2012-13 - 1366.41

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Export of chemical from India to U.S.

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Export of chemical from India to U.S.

TREND ANALYSIS3.2 EXPORT OF INORGANIC CHEMICALS FROM INDIA TO USA

(Value in US $ mn.)

YEAR VALUE TREND VALUE

2003-04 18.06 15.38

2004-05 22.70 24.05

2005-06 30.99 32.72

2006-07 38.16 41.39

2007-08 53.68 50.06

2008-09 - 58.73

2009-10 - 67.40

2010-11 - 76.07

2011-12 - 84.74

2012-13 - 93.41

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Export of chemical from India to U.S.

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Export of chemical from India to U.S.

TREND ANALYSIS3.3 EXPORT OF ORGANIC CHEMICALS FROM INDIA

(Value in US $ mn.)

YEAR VALUETREND VALUE

2003-04 2823.53 2678.89

2004-05 3620.49 3760.01

2005-06 4857.09 4841.13

2006-07 5730.31 5922.25

2007-08 7174.22 7003.37

2008-09 - 8084.49

2009-10 - 9165.61

2010-11 - 10246.73

2011-12 - 11327.85

2012-13 - 12408.97

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Export of chemical from India to U.S.

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Export of chemical from India to U.S.

TREND ANALYSIS3.4 EXPORT OF ORGANIC CHEMICALS FROM INDIA TO USA

(Value in US $ mn.)

YEAR VALUE TREND VALUE

2003-04 329.29 307.72

2004-05 389.52 425.30

2005-06 550.49 542.88

2006-07 666.31 660.46

2007-08 778.79 778.04

2008-09 - 895.62

2009-10 - 1013.20

2010-11 - 1130.77

2011-12 - 1248.35

2012-13 - 1365.93

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Export of chemical from India to U.S.

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Export of chemical from India to U.S.

4. ORGANIC CHEMICAL SUPPLIERS

1. INDO AMERICAN CHEMICALS

Business Profile

Suppliers and exporters of industrial chemicals including specialty chemicals, organic chemicals,

oleo chemicals, process chemicals, industrial flocculants, specialty polymers, polyacrylamide

flocculants and powder metallurgy lubricants.

Contact Details

Street Address: M-58, IInd Floor, Greater Kailash II (Market)

City: New Delhi    State: Delhi    PIN: 110 048    Country: India

Phone: +(91)-(11)-29216344    Fax: +(91)-(11)-29216352    

Website: http://www.indiamart.com/indo-american/speciality-chemicals.html

2. ABHISHEK IMPEX, MUMBAI

Business Profile

Engaged in manufacturing of organic chemicals, oilfield chemicals, bactericides, sodium

monochloroacetate, monochloroacetic acid, turkey red oil, pigment beta blue 15:3 and chemicals

for polyester & nylon yarn.

Contact Details

Street Address: 202/A2-1, Veer Hanuman Nagar, LM Road, Dahisar(W)

City: Mumbai    State: Maharashtra    PIN: 400 068    Country: India

Phone: +(91)-(22)-28933984    Fax: +(91)-(22)-28912615    

Website: http://www.abhishek-impex.com/

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Export of chemical from India to U.S.

3. GAYATRI MINERALS AND CHEMICALS

Business Profile

Manufacturer and exporter of organic chemicals, organic solvents, organic intermediates like

benzyl acetate ffc, benzaldehyde, ortho chloro benzoic acid, calcium chloride, benzoyl peroxide

and dibenzyl ether.

Contact Details

Street Address: 34-A, Shastri Nagar, Nizampura

City: Baroda    State: Gujarat    PIN: 390 002    Country: India

Phone: +(91)-(265)-2781284/2780506/2782593    Fax: +(91)-(265)-2780228    

Website: http://www.gayatrionline.com/

4. MODY CHEMICAL INDUSTRIES

Business Profile

Manufacture and export organic chemicals, inorganic chemicals, catalyst, hydantion, alphatic

bromide, dibromo alkane, bromate, bromide salts, bromo chloro alkanes, organics bromo

compunds and inorganics bromo compounds.

Contact Details

Street Address: 412, Hill View Estate, Siddhapura Compound, Amrut Nagar Road, Off L.B.S

Marg, Ghatkopar (W)

City: Mumbai    State: Maharashtra    PIN: 400 086    Country: India

Phone: +(91)-(22)-25004271/25006111/25006112    Fax: +(91)-(22)-25000546    

Website: http://www.modychem.com/

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Export of chemical from India to U.S.

5. MAJOR FACTORS AFFECTING THE EXPORT

India’s $ 1 trillion economy is the fourth largest and among the fastest growing

worldwide.

Its population is more than 1 billion.

Its Industry is growing 10% per year.

The middle class accounts for one-third of the total population. By 2025, India will have

24 million rich people, equivalent to the present population of Australia, and 400 million

urban middle class, more than the present population of the U.S.

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Export of chemical from India to U.S.

RATIONALE

Following are the reason to perform research on this topic, they are as follow:

Demand of the chemical is very high in international market

To find out performance of India in international market with reference of chemical

Chemicals are useful for many purposes.

There are different chemicals which is exported by India.

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Export of chemical from India to U.S.

OBJECTIVES

To study various market for chemical

To analyses the performance of India in global market.

To find new market for India.

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Export of chemical from India to U.S.

METHODOLOGY

The chemical sector is an important part of the Indian Economy,. But help for trade so as to

make the country’s export chemical more competitive is recent.

5.1 type of study Research of the exports of chemical from India to USA.

5.2 countries involved India and USA

5.3 data collection and sources I have used the secondary data for the preparation of this project. Sources of

secondary data being the books. Websites and search engines, magazines, journals and news paper articles.

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Export of chemical from India to U.S.

LIMITATIONS

The time period provided for the research was not sufficient to undergo an analytical research

work.

Direct face to face interaction for collecting the primary data was not possible.

The secondary data has been collected on the basis of various trade portals, thus the

authentication of the data is questionable.

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Export of chemical from India to U.S.

FINDINGS

5 years (2003-04 to 2007-08) figure of Export of Inorganic chemicals from India has

been taken for trend analysis. It’s clear that export is continuously increasing year by

year. That is a good sign for Indian chemical industry. In 2003-04 it was 424.09 US $ mn

and it reached upto 824.21 US $ mn in 2007-08 i.e. 94% growth in last five years. From

trend analysis its clear that export of inorganic chemical will increase in next five years

and may reach up to 1366.41 US $ mn. in 2012-13.

India doesn’t export inorganic chemicals in large quantity to USA but its increasing year

by year. In 2007-08 the export was 53.68 US $ mn which was around 200% of the export

of 2003-04. Trend analysis also showing increasing trend.

In 2003-04 India’s export of organic chemicals was 2823.53 US$ mn and in 2007-08 it

was 7174.22 US $ mn. i.e. 154% growth in last 5 years. Trend analysis also showing

increasing trend. In 2012-13 the export of organic chemicals from India may reach upto

12408.97 US $ mn.

India exports organic chemicals to USA in good quantity. In 2007-08 the export was

778.79 US $ mn which was around 135% of the export of 2003-04 (329.29 US $mn.).

Trend analysis also showing increasing trend. In 2012-13 the export of organic chemicals

from India to USA may reach upto 1365.93 US $ mn.

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Export of chemical from India to U.S.

SUGGESTIONS

The role of the Indian government should change from Industry “regulator” to

“facilitator”.

The government must help to create several petroleum, chemical and petrochemical

investment regions as well as special economic zones, nationwide to stimulate growth.

Custom duties must be reduced more.

The severe power shortages that currently plague India must be remedied.

India had in the past little presence on the world scene, but Reliance, Hikal, the Birla

Grop, United Phosphorus and the Tata Group have transformed that. But still there is

scope and more companies should come forward in chemical industry.

Reliance’s acquisitions abroad have been smaller. Since it is a big group, so it must

increase its acquisitions.

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Export of chemical from India to U.S.

CONCLUSION

Chemical industry occupies an important place in the country’s economy. During 2005-

06, it contributed about 3% of GDP and 17.6% of the manufacturing sector. However, India

continued to be a net importer in 2005-06, with imports of US$7.92 billion and exports at

US$5.95 billion. Indian chemicals industry during 2005-06 was US$30.59 billion, a growth of

10.23% over the previous year and a CAGR of 8.68% during the last 3 years.

The Indian chemical industry has sales of $50 billion / year, excluding, refining and

fertilizers. With refining and fertilizers its sales are $150 billion/year. In 2006-07 the chemical

industry grew 8.9%.

Potential investors are changing their views on India. Some companies are switching

their attention from China to India. India has become a preferred choice for sourcing dyes. India

is a global hub for pharma manufacturing.

India has one global leader in Reliance, a strong pharma presence, and a ‘long tail of

small and medium sized companies’. Emerging market companies , including Indian firms, are

starting to overtake established chemical groups in terms of market capitalization.

Liberalization of the Indian economy and the slashing of import duties have forced Indian

companies to transform their business models to become more competitive, have economies of

scale and look beyond India’s border.

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Export of chemical from India to U.S.

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Export of chemical from India to U.S.

REFERENCES

http://www.in.kpmg.com/TL_Files/Pictures/KPMG_Chemtech_Report.pdf

http://www.pharmabiz.com/article/detnews.asp?articleid=49270

http://en.cbichina.com/Common/1986865,0,0,0,1.htm

http://www.nandinichemical.com/gatewaytoindianchemind.html

http://kalex.in/Report/25%20-%2011%20Indian%20Chemical%20Industry.pdf

http://en.wikipedia.org/wiki/India_%E2%80%93_United_States_relations

http://www.financialexpress.com/news/chemicals-export-may-jump-20-this-fiscal/56830/

http://www.indianchemicalportal.com/chemical-industry-overview

http://www.reportlinker.com/p047658/Indian-Chemical-Industry.html

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