India expands domestic supply-chain strategy across chemicals

Amara Osei

India’s Department of Chemicals and Petrochemicals has withdrawn 38 quality-control orders, while 37 remain notified, Anupriya Patel said at IndiaChem 2026 in Mumbai. Patel, Minister of State for Health and Family Welfare and Chemicals and Fertilisers, said the government is reviewing compliance costs, certification delays and potential supply-chain disruptions.

What is India changing in upstream supply chains?

Patel said: “India is working towards strengthening its own supply chain in the sectors of chemicals, petrochemicals, semiconductors, and critical minerals, through increased manufacturing in the country and technology and value additions.”

Her programme combines coal gasification, the rare earth corridors set out in the Union Budget and the next stage of the India Semiconductor Mission.

The government aims to convert domestic coal into synthesis gas, or syngas, for chemical and fertiliser production. Patel said coal gasification would increase domestic feedstock availability, support employment and encourage value addition within India.

The rare earth corridors would connect the mineral-rich coast with processing plants and manufacturing units that produce critical components such as permanent magnets. Patel linked the plan to growing international demand for materials used in electronics, electric vehicles and renewable-energy technology. She said India needs domestic processing and manufacturing capacity to capture a larger share of that market.

Takeaway: The upstream strategy seeks to turn domestic minerals and coal into industrial feedstock, processing capacity and exportable components.

How will Semiconductor Mission 2.0 move beyond fabrication?

India Semiconductor Mission 2.0 will extend the ecosystem beyond the manufacturing infrastructure built during the first stage. Its priorities include:

• Local production of specialised electronic-grade chemicals and gases;
• Local manufacturing of machinery for the semiconductor sector;
• Intellectual-property development; and
• Skill development.

Patel said access to specialised materials, equipment and talent could affect the competitiveness and resilience of semiconductor manufacturing. The objective is a more comprehensive domestic value chain rather than production limited to fabrication infrastructure.

The minister also called for lower import dependence on strategic minerals such as lithium, cobalt and nickel. These minerals serve batteries, electric vehicles, renewable-energy solutions and defence equipment. She said domestic capacity for the materials and their end-use applications matters as manufacturers confront geopolitical uncertainty and competition for critical minerals.

Takeaway: Mission 2.0 targets the chemicals, equipment, intellectual property and skills required to support a broader semiconductor supply chain.

What do the bio-based and plastics plans require?

Patel said: “the policy framework will encourage the utilisation of existing resources and will also facilitate biomanufacturing and biofarming, which will help in making growth sustainable. In terms of the chemicals and petrochemicals industry, this move will help them diversify their raw materials and create environmentally friendly products.”

Her wider policy supports cleaner technologies, resource efficiency and lower carbon emissions. Patel also cited logistics planning, support for the plastics sector and regulatory easing as government priorities.

For chemicals and petrochemicals, the implementation test is whether these plans produce economically feasible manufacturing processes while meeting cost-efficiency and sustainability requirements.

The Department of Chemicals and Petrochemicals has approved nine plastic parks at different stages of development. The parks will strengthen downstream linkages, improve capacity utilisation and support exports.

A scheme for 18 centres of excellence will help educational and research institutions upgrade existing technologies and develop new applications for polymers and plastics. The programme will also modernise manufacturing processes and improve product quality. Patel framed stronger downstream capabilities and higher quality as requirements for expanding India’s domestic and export markets.

India ranks as the world’s fourth-largest petrochemicals producer, increasing the need for further technical development and a larger downstream manufacturing base.

Takeaway: Bio-based production, nine plastic parks and 18 research centres form the chemicals sector’s downstream expansion plan.

How will new import codes change monitoring?

New Harmonised System codes will separate several pesticide formulations and technical-grade products that previously sat in broad categories. The reclassification will improve tracking of agrochemical imports and allow analysts to assess trade trends for individual commodities.

Patel said nine additional HS codes will cover 287 technical pesticides imported for agricultural purposes. Another set of codes will cover 49 hazardous substances and wastes under international conventions, including the Basel, Rotterdam and Stockholm conventions.

She said the additional classifications could improve trade data, strengthen monitoring and increase visibility into import trends within individual chemical groups.

Takeaway: Nine new pesticide codes and 49 hazardous-material classifications will make chemical-import data more granular.

What does the quality-control review mean for manufacturers?

A high-level committee has recommended rationalising the quality-control order regime, including revoking, suspending or deferring selected requirements. The recommendation addresses unintended consequences for industrial supply chains after industry raised concerns about compliance expenses, certification delays and production disruption.

The department has withdrawn 38 QCOs, while 37 remain notified to make the relevant Bureau of Indian Standards requirements mandatory. Downstream manufacturers and micro, small and medium-sized enterprises could face added certification expense and administrative delays under an unchanged regime.

Takeaway: The review could reduce compliance and certification disruption, but manufacturers must still meet applicable product-quality and safety rules.