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By:

Akhilesh Sinha

25 June 2025 at 2:53:54 pm

Nadda's strategic meet signals urgency for chemical sector

New Delhi: As war simmers across the volatile landscape of West Asia, whether in the form of a direct confrontation between Israel, United States and Iran, or through Iran's hybrid warfare involving groups like Hezbollah and the Houthis, the tremors are no longer confined to the region's borders. They are coursing through the arteries of the global economy. India's chemicals and petrochemicals sector, heavily dependent on this region for critical raw materials, finds itself among the earliest...

Nadda's strategic meet signals urgency for chemical sector

New Delhi: As war simmers across the volatile landscape of West Asia, whether in the form of a direct confrontation between Israel, United States and Iran, or through Iran's hybrid warfare involving groups like Hezbollah and the Houthis, the tremors are no longer confined to the region's borders. They are coursing through the arteries of the global economy. India's chemicals and petrochemicals sector, heavily dependent on this region for critical raw materials, finds itself among the earliest and hardest hit by this geopolitical turbulence. It is in this backdrop that the recent meeting convened by Union Minister for Chemicals and Fertilisers J. P. Nadda at Kartavya Bhavan must be seen not as a routine consultation, but as a signal of strategic urgency. India's ambition to scale this sector from its current valuation of $220 billion to $1 trillion by 2040, and further to $1.5 trillion by 2047, will remain aspirational unless the country confronts its structural vulnerabilities with clarity and resolve. India today ranks as the world's sixth-largest producer of chemicals and the third-largest in Asia. The sector contributes 6-7 percent to GDP and underpins a wide spectrum of industries, from agriculture and pharmaceuticals to automobiles, construction, and electronics. It would be no exaggeration to call it the backbone of modern industrial India. Yet, embedded within this strength is a paradox. India's share in the global chemical value chain (GVC) stands at a modest 3.5 percent. A trade deficit of $31 billion in 2023 underscores a deeper issue: while India produces at scale, it remains marginal in high-value segments. This imbalance becomes starkly visible when disruptions in West Asia choke the supply of key feedstocks, shaking the very foundations of domestic industry. Supply Disruption The current crisis has laid this fragility bare. Disruptions in the supply of LNG, LPG, and sulfur have led to production cuts of 30-50 percent in several segments. With nearly 65 percent of sulfur imports sourced from the Middle East, the ripple effects have extended beyond chemicals to fertilisers, plastics, textiles, and other downstream industries. Strategic chokepoints such as the Strait of Hormuz have witnessed disruptions, pushing shipping costs up by 20-30 percent and adding further strain to cost structures. This is precisely where Nadda's emphasis on supply chain diversification and resilience appears prescient. In today's world, self-reliance cannot mean isolation; it must translate into strategic flexibility. While India imports crude oil from as many as 41 countries, several critical inputs for the chemical industry remain concentrated in a handful of sources, arguably the sector's most significant vulnerability. Opportunity Ahead A recent report by NITI Aayog outlines a pathway to convert this vulnerability into opportunity. It envisions raising India's GVC share to 5-6 percent by 2030 and to 12 percent by 2040. If achieved, the sector could not only reach the $1 trillion mark but also generate over 700,000 jobs. However, this transformation will demand more than policy intent, it will require sustained investment and disciplined execution. The most pressing challenge lies in research and innovation. India currently spends just 0.7 percent of industry revenue on R&D, compared to a global average of 2.3 percent. This gap explains why the country remains largely confined to basic chemicals, even as the world moves toward specialty and high-value products. Bridging this divide is essential if India is to climb the value chain. Equally constraining is the fragmented nature of the industry. Dominated by MSMEs with limited access to capital and technology, the sector struggles to compete globally. Cluster-based development models offer a pragmatic way forward, such as PCPIRs and the proposed chemical parks.

A Kafkaesque exit from Pakistan

Sometime in the early 1990s, our vessel was loading oil in Jeddah, bound ostensibly for a port in Sudan. The cargo, we were told, was a donation from Saudi Arabia to Sudan. While the bill of lading listed a Sudanese port as the destination, the shipper’s representative in Saudi Arabia quietly informed us that we were, in fact, to proceed to Karachi. We were thus asked to prepare for the voyage accordingly.


It was reasonably presumed that, once the vessel had departed Jeddah, the oil would be sold mid-sea by the consignee (ostensibly Sudan) to a Pakistani entity or business, likely at a price far below market value. Once the transaction was completed, a revised bill of lading naming Karachi as the discharge port would arrive via email. One could reasonably infer that this post-departure transaction was, if not overtly fraudulent, certainly irregular and very likely approved or at least tacitly sanctioned by the vessel’s owner.


Though the ship did not fly an Indian flag, its officers and crew were Indian. The legality of the paperwork meant little in practice for the Indian crew, given that the bill of lading had been formally processed. As my leave was due and the vessel was set to embark on a Europe–US run, I requested to be signed off in Karachi. I was fully aware, however, that for an Indian seafarer, disembarking in a Pakistani port could be a bureaucratic nightmare.


At the time, Karachi imposed stringent requirements for crew sign-off, especially for nationals of India, Israel, and Taiwan. Such crew members were required to hold a confirmed flight ticket departing within 24 hours of setting foot ashore. They had to be accompanied at all times by both an immigration officer and a policeman until clearing immigration at the airport. If an overnight hotel stay was required, then these two officials were to be lodged in the adjoining room, ensuring the crew member did not step outside.


Fortunately, I was spared the indignity of hotel surveillance. After completing inward immigration formalities which took nearly four hours and involved considerable effort by our ship’s local agent, I proceeded straight to the airport.


This local agent was a warm and friendly man. His ancestors, he told me, had migrated from Bihar to Pakistan during the Partition of 1947. Over the course of our four-hour wait, this Pakistani, a Mohajir as such migrants are known, shared two insights into the country’s politics.


The first concerned the status of Mohajirs in Pakistan. Although they had migrated on religious grounds, they had never been fully accepted as equals in Pakistani society. It was a bitter irony that many had come seeking belonging, only to be treated as outsiders. This sense of exclusion, he suggested, had sown the seeds of the MohajirQaumi Movement.


The second insight came during the drive to the airport. I sat in the vehicle with the immigration officer and policeman, chatting freely. At one point, traffic came to a halt due to VIP movement, an experience familiar to anyone who has lived in New Delhi. After a long wait, a convoy of motorcycles, official cars and eventually the VIP passed by. I asked who it was. “Sir ji, it is my baap, General saab,” replied the Pakistani official, half-jokingly. I remarked that in India, even a high-ranking army officer travels with just a pilot jeep and a couple of motorcycles.


It was then that I realised what many in Pakistan already knew: the army is not just an institution but the master of politics. And while the army is traditionally meant to instil fear in a country’s enemies, in Pakistan, it is the citizens who appear more terrified. I observed this first-hand: ordinary Pakistanis seemed genuinely scared of their military.


After finally clearing immigration at Karachi airport, I thanked my escorts and bid farewell to the ex-Bihari shipping agent, a Mohajir for whom I still feel a pang of sympathy. Perhaps one day, Sunny Deol - India’s celluloid patriot - will cross the border again to uproot another water pump. If so, he might find a willing helper in this former Bihari, now a Mohajir.


As for neighbours, one cannot choose them. But like many Indians, I continue to wonder: who will change Pakistan, and how and when for the better?


(The author, a former merchant navy sailor, is presently a shipping and marine consultant and member, Singapore Shipping Association)

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