Inorganic chemicals: On the expansion trail

India ranked 6th among leading importers of inorganic chemicals, while it ranked 17th among the leading exporters. The industry is expecting strong growth headwinds in the coming years due to the growth in end-use industries like glass, automotive and paints.

• Between 2009 and 2019, trade of inorganic chemicals has experienced a structural change, as indicated by the relocation of the market from Europe to Asia. 
• During 2018-19, India’s total imports of inorganic chemicals amounted to Rs. 7,112.86 crore and total exports stood at Rs. 2,137 crore.
• In 2018-19, the share of alkali chemicals in the total production of inorganic chemicals in India was 88.32%. During the same period, the share of alkali chemicals in the consumption of inorganic chemicals  was 78.12%. 
• In the global market, India has price competitiveness in potassium chlorate and titanium oxide with unit values of US$ 1,060 per ton and US$ 1,350 per ton, respectively.

Photo by Loïc Manegarium from Pexels

Inorganic chemicals, by definition, are chemicals, which do not include carbon and its derivatives as principal elements. Some of the end-use industries which use these chemicals are the paint industry, glass industry, automotive industry, detergent and soap industry, and paper and pulp industry. These chemicals can be classified into two sub-segments: alkali chemicals and basic inorganic chemicals. The chemicals that come under these sub-segments are as follows:

Alkali chemicals: 

• Soda Ash 
• Caustic Soda 
• Liquid Chlorine 

Basic inorganic chemicals: 

• Aluminium Fluoride 
• Calcium Carbide 
• Potassium Chlorate 
• Titanium Dioxide 
• Red Phosphorus 
• Hydrogen Peroxide 
• Calcium Carbonate

Globally, trade of inorganic chemicals has experienced a structural change over the past decade. Asia and Europe have been the largest contributors in import and export of this sector. However, their contributions in global trade of inorganic chemicals have changed significantly between 2009 and 2019. As the figure below shows, in 2009, the shares of Asia and Europe in world export of inorganic chemicals stood at 26.43% and 41.22% respectively.

By 2019, the share of Asia has increased to 37.8%, while that of Europe decreased to 32.94%. Similarly, in case of imports of inorganic chemicals, during 2009 to 2019, the share of Asia has increased from 31.9% in 2009 to 41.79% in 2019. On the other hand, share of Europe has reduced from 41.58% in 2009 to 33.31% in 2019.

Source: UN Comtrade, figures in %

According to 2019 data, China, USA, and Germany are three leading exporters as well as importers of the inorganic chemicals. 

India’s trade of inorganic chemicals

In 2019, India ranked 6th among leading importers of inorganic chemicals, while it ranked 17th among exporters. Figures below give a better picture of India’s trade in inorganic chemicals. During 2018-19, India’s total imports of inorganic chemicals amounted to Rs. 7,112.86 crore and total exports stood at Rs. 2,137 crore. In comparison to 2011-12, the imports of both alkali chemicals and basic inorganic chemicals have increased. However, the exports during 2011-19 show India’s export revenue has increased in case of alkali chemicals while have decreased for basic inorganic chemicals.

Source: Department of Chemicals and Petrochemicals, figures in Rs. Lakh

Source: Department of Chemicals and Petrochemicals, figures in Rs. lakh

Domestic production & consumption

India is the 6th largest chemical producer in the world and share of inorganic chemicals is 1/3rd of its total chemical production. 

In 2018-19, total production of inorganic chemicals in India was 9,106.48 thousand MT. In this, the share of alkali chemicals is 88.32% and basic inorganic chemicals account for the rest of the share in total production. Looking at the chemicals individually, soda ash is the most produced chemical with a production of 2,410 thousand MT in 2018-19. Among the basic inorganic chemicals, carbon black has the highest production of 447 thousand MT during 2018-19.