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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.

China’s Silent Annexation

Beijing’s renewed claims over the Shaksgam Valley lay bare how quiet coercion is redrawing the India-China-Pakistan frontier.

A barren tract of ice and rock high in the eastern Karakoram has again re-emerged as a geopolitical fault line at one of Asia’s most volatile junctions. China’s recent reassertion of its claim over the Shaksgam Valley, coupled with fresh justifications for infrastructure development there, has revived an old dispute that India insists is neither settled nor obscure.


The Shaksgam Valley, also known as the Trans-Karakoram Tract, lies north of the Siachen Glacier and south of China’s Xinjiang region, abutting Aksai Chin to the east. Before 1947 it formed part of the princely state of Jammu and Kashmir, which acceded to India at independence. During the first Indo-Pakistani war of 1947–48, Pakistan illegally occupied large swathes of the region, including areas adjacent to Shaksgam. Then in March 1963, Pakistan signed a border agreement with China ceding roughly 5,180 square kilometres of the valley to Beijing.


Root Cause

That agreement remains the original sin of the dispute. Pakistan, which did not possess sovereign title over the territory, had no legal authority to gift it away. Even the document itself tacitly acknowledges its provisional nature. Article 6 explicitly states that the boundary settlement would be reopened once the Kashmir dispute between India and Pakistan was resolved. In other words, China’s claim rests not on final settlement but on a conditional arrangement with a party that lacked standing. India rejected the agreement at the time and has done so consistently since, declaring it “illegal and invalid.”


Yet, facts on the ground have a way of hardening into perceived legitimacy. Since the 1960s China has administered Shaksgam as part of its Xinjiang Uyghur Autonomous Region, steadily extending roads, logistical networks and security infrastructure across the high plateau. These efforts accelerated after the launch of the China-Pakistan Economic Corridor (CPEC), Beijing’s flagship Belt and Road project linking Kashgar in Xinjiang to the Chinese-developed port of Gwadar on Pakistan’s Arabian Sea coast.


CPEC is often presented as an economic venture. In strategic terms, it is something else entirely. By creating an overland energy and trade corridor that bypasses the Malacca Strait (China’s acknowledged maritime choke point), Beijing reduces its vulnerability to naval disruption. Shaksgam, though remote, sits uncomfortably close to this axis. Infrastructure built ostensibly for commerce can be repurposed swiftly for military logistics, allowing faster troop movement, better surveillance and deeper integration between Chinese and Pakistani forces.


Strategic Triangle

For India, this is not an abstract concern. Shaksgam lies near the Siachen Glacier, the world’s highest battlefield, and not far from Aksai Chin, territory seized by China after the 1962 war and still claimed by New Delhi. Together, these regions form a strategic triangle where India faces its two principal adversaries in tacit alignment. The development of dual-use infrastructure here tightens the pincer, raising the costs of Indian defence while enhancing China’s ability to apply pressure across multiple fronts.


Beijing’s method is familiar. Assert claims through maps and consolidate them through construction. Then, normalise such claims through repetition. China has deployed this playbook in the South China Sea, along the Line of Actual Control with India, and increasingly in the Himalayas’ lesser-known corners. The Shaksgam Valley fits well into this pattern of ‘salami slicing,’ where such incremental moves are deployed to change ground realities without triggering outright conflict.


While India’s response has been firm in rhetoric, it has been constrained by geography and resources. New Delhi has reiterated that Shaksgam is Indian territory and condemned China’s activities as attempts to change the status quo. Behind the scenes, India has accelerated border infrastructure development, improved troop mobility and invested in surveillance and niche technologies suited for high-altitude warfare.


But the challenge is broader than military preparedness. The dispute unfolds at a moment of systemic flux in the international order. Power is diffusing, alliances are hardening and coercive strategies are increasingly normalised. China’s partnership with Pakistan exemplifies a transactional alignment aimed at constraining India’s rise. By embedding its presence in disputed territory, Beijing complicates any future settlement of Kashmir while binding Islamabad closer to its strategic orbit.


This leaves India with limited but important choices. One is clarity of purpose. New Delhi must decide whether it is content merely to contest China’s claims diplomatically or prepared to impose political, economic and strategic costs for continued encroachment. Another is coalition-building. As Asia’s security architecture shifts, engagement with like-minded powers becomes less optional than essential. Shared concerns over coercion, connectivity and territorial revisionism provide ample common ground.


The value of Shaksgam Valley lies precisely in its emptiness, which allows power to be projected quietly and claims to be entrenched without spectacle. That is why it matters.


China’s cartographic confidence rests on the assumption that time and infrastructure will do its work. India’s task is to ensure that legality, history and strategy are not eroded by altitude and neglect. Frozen valleys have a way of thawing into flashpoints. Shaksgam is one such place and ignoring it would be a luxury India can no longer afford.


(Author is retired naval aviation officer and defence and geopolitical analyst. Views personal.)

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