Economic Survey flags steady growth in chemicals and petrochemicals sector
New Delhi: The Economic Survey 2025–26 highlighted steady growth in the chemicals petrochemicals sector, stating that it contributed 8.1 per cent to the manufacturing sector’s Gross Value Added (GVA) in FY 24.
The survey said the chemicals petrochemicals sector remained a key pillar of India’s industrial economy. In particular, it noted the sector’s strong backward linkages with petroleum refining and natural gas processing, which supported raw material availability and cost efficiency.
At the same time, the survey pointed to extensive forward linkages with several downstream industries. These included pharmaceuticals, textiles, agriculture inputs, construction materials and consumer goods manufacturing. As a result, growth in the chemicals petrochemicals sector continued to have a multiplier effect across the wider manufacturing ecosystem.
The Economic Survey observed that the sector maintained stability even amid global supply chain pressures. Moreover, it said sustained domestic demand and gradual capacity expansion supported consistent output levels over the years.
According to official data cited in the survey, production of selected major chemicals and petrochemicals followed a clear upward trend over the last decade. Total output increased from 45,638 thousand metric tonnes in FY 16 to 58,617 thousand metric tonnes in FY 25.
Economic Survey tracks chemicals petrochemicals sector production trend
The survey stated that this rise translated into a Compound Annual Growth Rate of 2.8 per cent during FY 16–FY 25. Furthermore, it noted that production growth remained broad-based across monitored product categories.
The Department of Chemicals and Petrochemicals monitored data for selected major chemicals and petrochemicals only. Officials clarified that the figures were based on Monthly Production Reports submitted by manufacturers operating large and medium-scale units.
The survey also pointed out that installed capacity and production data did not include small-scale units. Therefore, the overall size and contribution of the chemicals petrochemicals sector could be higher than the reported figures.
Officials said the findings underlined the sector’s strategic importance for manufacturing growth, import substitution and industrial resilience. They added that sustained investment and policy support would remain crucial for long-term expansion.
