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Post-Budget 2024: How the New Policies Impact the Chemical Industry

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India’s chemical industry is incredibly diverse and produces more than 80,000 commercial products.  These products can be classified into six categories namely bulk chemicals, agrochemicals, petrochemicals, fertilizers, polymers and other specialty chemicals. Did you know that India is the 6th largest producer? It is also the 3rd largest producer in Asia. The chemical industry contributes 7% to India’s GDP, anticipated to grow to US$ 1 trillion by 2040. When it comes to agrochemicals, India is the fourth-largest producer globally.

In this blog, we will take a look at everything the budget 2024 had in store for the chemical industry including the post budget investment effects that the industry might face.

Key Policy Changes Affecting the Chemical Industry

Some of the policy changes that have come post budget 2024 as proposed in the interim budget for the chemical industry include:

  1. Increase in green focus aiding a sustained economic development
  2. Battery and energy storage solutions need specialised chemicals and this will help speciality chemical companies in the long run
  3. Possible growth of speciality chemical companies involved in fluorination
  4. Reduction of customs duty from 5% to 2.5% on Fluorospar, a raw material used to manufacture fluorochemicals used in pharma, energy solutions and agri-chem  
  5. Fiscal incentives and increase in loans for MSMEs to help increase working capital and help compete with the interference by the Chinese market. 

#BudgetSimpleHai

The Union Budget 2024, will affect just about every sector of the economy, including the Indian education sector. Here's what we can expect:

  • The education sector is set to bloat, projected to touch a whopping US$225 billion by FY25
  • Funding to build up infrastructure and bring education to the underprivileged
  • Policy reforms to reduce commercialised education loans
  • Industry-academia collaboration to revamp educational institutions

To simplify this year’s Budget and to decode its impact on your life, your investment portfolio, and all that you do, we bring you #BudgetSimpleHai!


Join us on our website or head over to any of our social handles to get the latest updates on the Union Budget as it happens. Read in-depth reports, watch videos, and get a clear understanding of what’s in store.

Kyunki Bajaj Broking ke saath, #BudgetSimpleHai

Financial Implications for Chemical Companies

Some of the post budget 2024 impacts on chemical companies include:

  1. Increase in Bulk Drug Parks with the introduction of production linked incentive or PLI schemes having a budget of ₹1,629 crore
  2. Allocation of ₹192.21 crore to the Department of Chemicals and Petrochemicals.
  3. The PCPIR or the Petroleum, Chemicals and Petrochemicals Investment Region in Paradip has attracted investments worth ₹73,518 Crores
  4. This region has thus been able to provide employment to 40,000 workers

Conclusion

With the post budget 2024 recommendations for the chemical sector in keeping the interim budget in mind, here are some of the key highlights for the industry:

  1. Reduction of customs duty Fluorospar, a raw material used to manufacture fluorochemicals used in pharma, energy solutions and agri-chem  
  2. Fiscal incentives and increase in loans for MSMEs to help increase working capital and help compete with the interference by the Chinese market.
  3. Allocation of ₹192.21 crore to the Department of Chemicals and Petrochemicals.
  4. With a focus on green and sustained economic development increase in the need for speciality chemicals that aid battery and energy storage solutions has increased. 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

1. What are the major policy changes affecting the chemical industry in Budget 2024?

Answer Field

With the interim budget in tow, the post budget 2024 focus on green and sustained economic development will lead to an increase in the need for speciality chemicals that aid battery and energy storage.

What are the financial implications of the Budget 2024 policies for the chemical sector?

Answer Field

With production linked incentive or PLI schemes having a budget of ₹1,629 crore, there has been an increase in Bulk Drug Parks. As a part of the interim budget the government has also allocated ₹192.21 crore to the Department of Chemicals and Petrochemicals. The Petroleum, Chemicals and Petrochemicals Investment Region in Paradip has also attracted investments worth ₹73,518 Crores leading to employment of 40,000 workers

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