India Chemicals Sector Gears Up for $30B Import Substitution

The chemicals sector in India is developing into a great growth story, with a $25-30 billion opportunity to substitute imports, SRF Limited’s chairman and Managing Director Ashish Bharat Ram stated.

As the economy picks up steam, domestic demand is becoming strong enough to absorb much of domestic production, so investments on the domestic front are increasingly viable. SRF, an important player in speciality chemicals and technical textiles, is planning large investments in over the next three to five years.

In a strategic development, U.S.-based Chemours Company has finalized agreements with SRF Limited to enhance its global supply chain.

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The collaborative partnership will provide Chemours access to a significant additional capacity, in fluoropolymers and fluoroelastomers, and increase its overall flexibility without virtually any major capital expenditure. Chemours’ CEO Denise Dignam stated the partnership aligns with Chemours’ Pathway to thrive strategy that shifts the company towards higher-value applications, and responsible sourcing and manufacturing. SRF’s President Prashant Yadav emphasized the company’s ability to strategically produce complex chemicals and its dependable involvement in advanced materials.

The opportunity comes at a tough time for India’s economy. The rupee dropped 6% to 88.33 per dollar when the U.S. announced a 50% increase in tariffs on exports of Indian origin. The ramifications have led to capital flight of $9.7 billion since June, adding to a larger current account deficit; while the RBI is intervening to stabilize the currency, heightened uncertainty has instead pushed investors toward defensive plays like pharmaceuticals and motions in USD/INR hedging.

Nonetheless, SRF’s focus on import substitution in speciality chemicals and refrigerant gases lines up with the broader push toward self-reliance in India and appears to signal long-term growth opportunities in the industry.