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Chemicals & Materials

Advantage Tamil Nadu

Tamil Nadu is the second largest State in chemical production and one of the leading States in plastics, polymer and pharma manufacturing in the country. It has the potential to become the No. 1 hub in the country for the chemicals and petrochemicals industry.

The Tamil Nadu chemical sector is a major contributor to the State’s economy, accounting for around 10% of the State’s GDP. The sector is highly diversified, with a wide range of products, including fertilizers, plastics, pesticides, dyes, pharmaceuticals and inorganic chemicals.

The State Government has categorized specialty chemicals and petrochemicals as sunrise sectors, enabling special and attractive incentives for the industry. There are currently over 2,500 chemical factories in Tamil Nadu. The State has also established a polymer industries park for plastic manufacturing and three petrochemical units are being set up to position Tamil Nadu as a petrochemical investment destination..

Some of the key opportunities for the Tamil Nadu chemical sector:

  • Growth in domestic demand for chemicals and petrochemicals
  • Increasing exports of chemicals and petrochemicals
  • Investment in new chemical and petrochemical projects
  • Development of specialty chemicals and petrochemicals
  • Creation of downstream industries

Overall, the Tamil Nadu chemical sector is poised for a rapid growth in the coming years. The State’s strong economic fundamentals, supportive government policies and growing domestic and export demand for chemicals and petrochemicals are expected to drive the sector’s growth.

startuptn-suganya

Sector Incharge

Suganya Selvaraj

suganya@startuptn.in

9176683033

Chemical tech Sector Map

Introduction

Introduction

India is a strong global dye supplier, accounting for approximately 16% of the world production of dyestuff and dye intermediates. The chemical industry in India has been de-licensed, except for a few hazardous chemicals. Upcoming Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) and Plastic Parks will provide state-of-the-art infrastructure for the chemicals and petrochemicals sector.

Initiatives

Initiatives

The Tamil Nadu government has a number of initiatives in place to support the chemical sector. They include:

  • Tamil Nadu Chemicals and Petrochemicals Policy 2021 : This policy aims to attract investment and promote the growth of the chemical and petrochemical sector in Tamil Nadu. It provides a number of incentives to companies, such as land subsidies, capital subsidies and tax breaks.
  • Tamil Nadu Chemicals and Petrochemicals Corporation (TNCPC): TNCPC is a State-owned corporation that promotes the development of the chemical and petrochemical sector in Tamil Nadu. It provides a range of services to companies in the sector, such as land acquisition, infrastructure development and financial assistance.
  • Tamil Nadu Petrochemicals Complex (TNPC): TNPC, located in Cuddalore, produces a range of petrochemical products, such as ethylene, propylene and butadiene. It is a major supplier of petrochemical products to industries in Tamil Nadu and other parts of India.
  • Tamil Nadu Chemicals and Petrochemicals Manufacturing Cluster (TCPMC): TCPMC is a cluster of chemical and petrochemical companies located in Cuddalore. It provides a number of benefits to companies, such as shared infrastructure, common effluent treatment facilities and access to skilled labour.

Salient features of the Tamil Nadu Chemicals and Petrochemicals Policy 2021:

  • Land subsidy of up to 50% for setting up new chemical and petrochemical plants in Tamil Nadu.
  • Capital subsidy of up to 25% for setting up new chemical and petrochemical plants in Tamil Nadu.
  • Tax breaks of up to 100% for the first 5 years of operation for new chemical and petrochemical plants in Tamil Nadu.

Tamil Nadu Budget 2023-24 has a number of announcements for the chemical industry. They include:

  • Reduction in stamp duty on registration of land for chemical industries: The stamp duty on registration of land for chemical industries has been reduced from 7% to 5%. This will make it cheaper for chemical companies to acquire land in Tamil Nadu and set up new plants.
  • Subsidy for setting up new chemical industries: The Tamil Nadu Government will provide a subsidy of up to 25% of the capital investment for setting up new chemical industries in the State. This will help to attract investment and promote the growth of the chemical sector in Tamil Nadu.
  • Focus on research and development: The Tamil Nadu Government will establish a Centre of Excellence for Petrochemicals in the State to focus on research and development in the petrochemical sector and help to develop new technologies and products.
  • Training and development programmes for the chemical sector workforce: The Tamil Nadu Government will launch training and development programmes to build a skilled workforce for the chemical sector. This will help to ensure that chemical companies in Tamil Nadu have access to the skilled workforce to grow and prosper.
  • Reduction in power tariffs for chemical industries: The Tamil Nadu Government will reduce power tariffs for chemical industries by 10%. This will help to reduce the cost of doing business for them in Tamil Nadu.
  • Focus on infrastructure development: The Tamil Nadu Government will invest heavily in infrastructure development, such as roads and ports. This will improve the connectivity of chemical plants in Tamil Nadu and make it easier to transport chemicals to domestic and international markets.

The Union Government has implemented a number of schemes to support the chemical sector. Some of the key initiatives include:

  • Production Linked Incentive (PLI) Scheme for Advanced Chemistry Cell (ACC) Battery Storage: This scheme aims to attract investment and promote the manufacturing of ACC batteries in India. It will provide financial incentives to companies that set up manufacturing facilities.
  • Scheme for Promotion of Manufacturing of Critical KSMs/APIs in India: This scheme aims to reduce India’s dependence on imports of key starting materials (KSMs) and active pharmaceutical ingredients (APIs). It will provide financial incentives to companies that set up manufacturing facilities.
  • National Policy on Petrochemicals: This policy aims to promote the growth and development of the petrochemical industry in India. It focuses on attracting investment, promoting research and development and improving the competitiveness of the petrochemical industry.
  • Chemical Policy, 2011: This policy aims to promote the sustainable growth of the chemical industry in India. It focuses on promoting innovation, improving safety and environmental standards and developing the chemical industry in rural areas.
  • Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) Scheme: This scheme aims to create world-class industrial infrastructure for the petroleum, chemicals and petrochemicals sector. It provides financial incentives to States to develop PCPIRs.
  • Chemicals Promotion and Development Scheme (CPDS): It provides financial assistance to chemical companies for a variety of activities, such as setting up new manufacturing facilities, expanding existing ones and undertaking research and development.
  • National Petrochemical Awards: They are presented annually to recognize excellence in the petrochemical industry. The awards are given in a variety of categories, such as best petrochemical plant, best petrochemical product and best petrochemical research project.
  • Chemicals Promotion and Development Scheme (CPDS): This scheme provides financial assistance to companies for the development of new chemical products and processes, besides upgradation of existing chemical plants.
  • Plastic Parks: The Union Government has set up Plastic Parks in various parts of the country. They provide infrastructure and other facilities to companies that are engaged in the manufacturing and processing of plastics.
  • Centre of Excellence (COE) in Petrochemicals: COEs provide research and development support to the petrochemical industry.

The Union Budget 2023-24 has a number of initiatives for the chemical industry. They include:

  • Reduction in customs duty: The customs duty on denatured ethyl alcohol, acid-grade fluorspar and crude glycerin has been reduced. This will make these chemicals cheaper for Indian companies and help to boost the competitiveness of the chemical industry.
  • Extension of concessional duty on lithium-ion cells: The concessional duty on lithium-ion cells for batteries has been extended for another year. This will support the growth of the electric vehicle industry and the demand for lithium-ion batteries.
  • Increase in credit guarantee for MSMEs: The government has increased the credit guarantee for MSMEs from Rs 1 lakh crore to Rs 2 lakh crore. This will make it easier for MSMEs in the chemical sector to access credit and grow their businesses.
  • Focus on infrastructure development: The government has announced a number of initiatives to develop infrastructure, such as roads, railways and ports. This will improve the connectivity of chemical plants and make it easier to transport chemicals to domestic and international markets.
  • Reduction in corporate tax: The corporate tax rate for domestic companies has been reduced from 30% to 25%. This will reduce the cost of doing business for chemical companies and make them more competitive.
  • Increase in capital expenditure: The government has increased its capital expenditure by 35.4%. This will boost the demand for chemicals used in infrastructure development.
  • Focus on research and development: The government has announced a number of initiatives to promote research and development in various sectors, including the chemical sector. This will help to develop new chemical products and processes and make the Indian chemical industry more competitive.

Resources

Resources

Incubators and R&D institutions for chemical industries in Tamil Nadu:

  • Chemical Industries Association (CIA)
  • Tamil Nadu Petrochemicals Complex (TNPC)
  • Tamil Nadu Chemicals and Petrochemicals Manufacturing Cluster (TCPMC)
  • Anna University – Chennai
  • Indian Institute of Technology Madras (IIT Madras)

Incubators and R&D institutions for chemical industries in India:

  • National Chemical Laboratory (NCL)
  • Central Institute of Plastics Engineering & Technology (CIPET)
  • Indian Institute of Technology Bombay (IIT Bombay)