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...

min read

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.

Here's how Pahalgam terrorist attack will affect Kashmir's Rs 12,000 crore tourism

Correspondent
Apr 23, 2025
2 min read

The recent terrorist attack on tourists in Pahalgam, Jammu and Kashmir, is not just an act of violence—it’s a major blow to the local economy and the livelihood of around 2.5 lakh Kashmiris who depend on tourism. This incident has shaken the confidence of visitors and thrown Kashmir’s tourism-driven economy into a deep crisis. Every shot fired at innocent tourists has pushed the region’s economic progress several years back.

Here’s a look at how serious the damage could be.

Wave of Cancellations Begins

Following Tuesday’s attack, tourists have started cancelling their travel plans to Kashmir. Hotel and taxi bookings are being withdrawn on a large scale, indicating immediate fallout on the ground.

Rs 12,000 Crore Tourism Industry at Risk

Tourism is the main livelihood for thousands in Kashmir, often called "Heaven on Earth." The region’s tourism industry is currently valued at Rs 12,000 crores and was expected to grow to Rs 25,000–30,000 crores by 2030. It contributes nearly 7–8% to Jammu and Kashmir’s GDP. The timing of the attack—right at the start of the vacation season—has come as a devastating blow, especially for Pahalgam, often referred to as India’s Switzerland.

Dal Lake alone supports over 1,500 houseboats, and there are more than 3,000 hotel rooms available across the valley—many of which now lie vacant.

Tourist Numbers Had Been Soaring

Tourism in Kashmir had been on a steady rise since it became a Union Territory. In 2020, the valley welcomed 34 lakh visitors. This number jumped to 1.13 crore in 2021, 1.88 crore in 2022, 2.11 crore in 2023, and peaked at 2.36 crore in 2024—including over 65,000 foreign tourists. Top attractions include Gulmarg, Sonamarg, Pahalgam, and Dal Lake. Gulmarg alone generated Rs 103 crore in tourism revenue in 2024.

Government's Push for Tourism

The central government had been actively promoting tourism in Kashmir. With a Rs 1,000 crore budget, the plan included improved infrastructure, direct air connectivity, visas on arrival for international tourists, and development of 75 new tourist spots, cultural sites, and Sufi shrines. Rail links are also being developed to connect Kashmir more seamlessly with the rest of India, including the introduction of the Vande Bharat Express.

Kashmir is also a favorite for Bollywood shoots and destination weddings, which now face uncertainty due to the security concerns raised by the attack.

Rising Vehicle Registrations Show Growth

Another sign of growing tourism in Kashmir is the surge in vehicle registrations. In 2017, the number of registered vehicles stood at 14.88 lakh. By 2024, this number had nearly doubled to 27.29 lakh, reflecting both public and private vehicles used to support the expanding tourism sector.