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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.

Pakistan warns of strikes on Indus River structures after treaty suspension



Islamabad: Pakistan’s Defence Minister Khawaja Asif has issued a warning to India, stating that any structure built on the Indus River in "violation of the Indus Waters Treaty" would be targeted. The treaty was suspended following the Pahalgam terror attack.


Relations between the two neighbours deteriorated after the April 22 attack in Pahalgam, which claimed the lives of 26 people, most of whom were tourists.

As part of its response, India announced the suspension of the 1960 Indus Waters Treaty, an agreement that regulates water sharing between both nations.


During an appearance on a Geo News programme on Friday, Asif said, "Certainly, if they attempt to build any kind of structure, we will strike it." He further stated that any construction on the Indus River would be viewed as "Indian aggression" against Pakistan.


"Aggression is not just about firing cannons or bullets; it has many faces. One of those faces is [blocking or diverting water], which could lead to deaths due to hunger and thirst," he added.


The defence minister also warned, "If they make any architectural attempt, then Pakistan will destroy that structure.


"But for now, we are heading to forums available to us, starting from the IWT [Indus Waters Treaty]. We will pursue this matter."


According to a report published Friday, Pakistan is preparing to formally notify India diplomatically over its unilateral suspension of the treaty. The decision followed initial discussions among the Foreign Affairs, Law, and Water Resources ministries, The Express Tribune reported.


In a separate development on Saturday, Pakistan carried out a training launch of the Abdali weapon system—a surface-to-surface missile with a 450-km range.


Earlier, on April 24, Prime Minister Narendra Modi pledged to take action against the perpetrators of the Pahalgam attack and those supporting them.

In a high-level meeting with senior defence officials on April 29, Modi said the armed forces have "complete operational freedom" to determine the method, targets, and timing of India’s response.

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