STRIKING THE RIGHT CHEMISTRY

MULTINATIONALS CASH IN AS INDIA BECOMES A MANUFACTURING HUB FOR CHEMICALS, THANKS TO FAVOURABLE POLICY DECISIONS AND CHANGING GLOBAL MARKET DYNAMICS.

- P.B.JAYAKUMAR

MOST MULTINATIONAL chemical companies operating in India can boast of their Indian connection dating back to decades, or even centuries! Take Bayer AG Group, for instance. Since 1863, the German major has been present in India’s agriculture and healthcare sectors. Another leading MNC and German chemical major BASF, formerly The Bayer Company, claims its Indian connection goes back to over 130 years. Multinational chemical major Lanxess, operating in India since July 2004 under the new name (it was earlier Bayer Chemicals), also boasts of an Indian legacy of over a century.

“It is not fair to label Bayer as a foreign company operating in India. We are very much an Indian company partnering with the country’s progress,’’ says Simon Wiebusch, MD and CEO, Bayer CropScience Ltd. Such companies have tapped rising opportunities in a growing Indian market for decades, and are now making the country an important global manufacturing hub for chemicals, agrochemicals and speciality products, at a time when the domestic industry is transforming into a major global supplier.

A Fortune India study of 31 chemical and agrochemical MNCs operating in India puts their total income at ₹1,17,339 crore in FY24.

Foreign direct investment (FDI) in chemicals and petrochemicals has also been on a roll for the past few years, especially post-Covid. According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in chemicals (other than fertilisers) stood at ₹14,662 crore in FY23, a highest-ever record growth of 91%, compared with ₹7,202 crore in FY22. Cumulative inflows stood at around ₹1.34 lakh crore between April 2000 and March 2024.

The China-plus factor