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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.

Indonesia’s Indic DNA Needs Protection

Beneath the world’s largest Muslim democracy lies an older Indic inheritance now under strain from deepening Arabisation.

In last two articles we discussed the idea of Indosphere and the challenges faced by it. We now move to the core, by picking up a suitable example, whereby a more granular understanding of both these aspects can be developed. The examples of identifiably strongest representative Indic character are two in the whole Southeast Asia region, one each from its mainland and maritime sub-regions – Cambodia and Indonesia respectively. We need to choose the right example out of these, to be able to dwell adequately on all related aspects and do justice to the topic – the need to protect the Indic DNA.


Grave Challenges

The position of Cambodia as a nation-state of the region has throughout been that of a weakling. The decay has been consistent, set off especially by the Mao-inspired Khmer Rouge communist regime between 1975-1979. Secondly, thanks to its physical proximity with China and the deep inroads of various kinds made in it by the latter, it gives out a picture of little hope for its healing and assertion of full sovereignty. That leaves us Indonesia, not down as Cambodia is, but nevertheless faced with grave challenges related to the survival of its Indic DNA, and yet showing a few rays of hope for the hopeful. Secondly, although Cambodia is weakening as an entity and from the view-point of its Indic DNA as well, the challenge to the latter does not become equally grave due to the officially protected status of its Buddhist set-up.


That is not the case with Indonesia. Being a Muslim-majority nation as well as the largest Muslim country of the world, it throws up different set of challenges. On one hand, its Indic DNA is deeply embedded - in its mixed ethnicity, its heritage of Hindu-Buddhist civilization manifested in its ancient monuments and classic literature, highlighted by mighty historical empires as well as in the characteristic life-philosophy and spirituality inculcated by its society. On the other hand, there is this faith of Islam, introduced around seven centuries ago and spread aggressively over next two centuries to cover the entire archipelago, which has been tugging, directly and indirectly, at the roots of that embedded Indic DNA relentlessly. At that, one may like to conclude it to be a routine case of Islamization of a pre-Islamic culture etc. But this is actually a very complex situation, deserving a nuanced understanding.


It is known that Islam, like Christianity, believes firmly in proselytization, and pursues it vigorously the world over. It did the same thing in Indonesia. However, two strange things happened in the process. Firstly, since this new faith, just like its predecessors – Hinduism and Buddhism – was received initially from India, it was largely welcomed without resistance, which resulted in a largely and uncharacteristically peaceful introduction of Islam, though not entirely. Secondly, as the Indic DNA was strongly entrenched and suitably localized since a millennium or so before that, it helped shape Islam too in a local mould thereby toning it down to quite some extent. As a result, although the religious map of Indonesia changed, it did not turn into, for example, a Pakistan-like entity, turning hostile towards own roots. Rather, it produced a unique phenomenon of syncretic Islam, which was acclaimed globally as ‘Indonesian Islam’ for long. The things were fine for a few centuries till the 20th century brought Indonesians in frequent and closer contact with West Asia, the place of origin of Islam, through rise in haj pilgrimage and sought after religious training.


Turning Point

The beginning of this interaction was the turning point, when the West Asian Islam started overwhelming the localized model and overtaking the syncretic culture of Indonesia. Passage of over a century thereafter strengthened the staunch or intolerant Islam further, and emboldened the extremist elements spread throughout the society and the polity. This has resulted in practically narrowing the space for respectable existence for Indonesia’s minorities, and more significantly, it has shrunk the space for the innate diversity and pluralism of Indonesia’s syncretic culture, upheld by its Indic DNA for centuries. This shrinkage is helped indirectly by some other factors too – immediate neighbourhood of openly Islamist and minorities-persecuting Malaysia; increasing presence of Pakistani and Bangladeshi clergy in Indonesian mosques and madrassas; rising clout of the ‘Organization of Islamic Cooperation’ (OIC), widely seen as the ‘Islamic United Nations’ of the world. 


This should be seen as a worrisome situation in India, the mother country, and obviously by its ruling dispensation, the de facto protector of its interests. President of Indonesia, during his India visit of 2025, was seen talking proudly about his own Indian DNA; but the situation on ground in Indonesia is steadily shrinking for the Indic cultural DNA, in favour of an Islamist world-view. It is not about matters of faith of individuals or communities, and an ideological fight over it. It’s a struggle against a narrow world-view that is carried along in the name of faith, and spread among the otherwise healthy societies of the world, inevitably sowing seeds of division, animosity and unending friction. Indonesia clearly needs to be protected from further Arabization, thereby avoiding a potential threat to emerge in India’s neighbourhood. It can be done, among other things, by reinforcing its Indic DNA. Luckily, the situation there has yet not turned into one akin to that in Pakistan or Bangladesh. There are rays of hope, manifesting in some established social organizations as well as emerging youth movements, who are understandably worried about the future of their beloved motherland of pluralist Indonesia. India must hope, help and pray for their success.


(The writer is a Ph.D. researcher in international relations. Views personal.)


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