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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.

Trump’s Perilous One-Man Tango with Pakistan

Donals Trump’s overture to Pakistan army chief Asim Munir reveals more about American misjudgements than any grand geopolitical strategy.

When Donald Trump hosted Pakistan’s army chief, General Asim Munir, for an unusually high-profile lunch at the White House on June 18th, it raised eyebrows in Washington and beyond. In the midst of a volatile Iran-Israel standoff, the gesture appeared less about diplomacy and more about spectacle - a transactional manoeuvre aimed at leveraging an old ally for short-term American interests.


The event drew sharp scrutiny from analysts and observers across South Asia and the Middle East. It was classic Trump: performative, opportunistic and aimed at securing short-term diplomatic leverage with Islamabad’s deep state.


The United States has maintained a fraught yet enduring relationship with Pakistan since its independence in 1947. While couched in the language of partnership, the ties have always been dictated by hard-nosed strategic calculus. For Washington, Pakistan’s importance lies in its geography: perched between Iran, Afghanistan, and China, it offers a convenient fulcrum for projecting American interests in a restive neighbourhood.


Yet this alliance has long been fraught with contradictions. Washington calls Pakistan a counterterrorism partner while turning a blind eye to its double game with jihadist groups. It touts military cooperation while funnelling billions into a country that has rarely aligned itself with broader American interests, especially when they run counter to those of China - Pakistan’s all-weather ally.


Why then does America persist in elevating Pakistan’s military elite to the status of indispensable partners? Part of the answer lies in Washington’s compulsive tendency to play balance-of-power politics by propping up a weaker Pakistan to hedge against a rising India.


America’s military and financial patronage of Pakistan persists despite compelling reasons to rethink the equation. Following the chaotic withdrawal from Afghanistan in 2021, Washington is keen to preserve a foothold in South Asia. Pakistan, for its part, remains useful at least superficially in nudging the Taliban and providing intelligence. But this indulgence comes at a cost. It emboldens Pakistan’s military establishment, destabilizes India’s western flank, and risks undermining burgeoning US-India ties, which are critical to the Indo-Pacific strategy aimed at counterbalancing China. A strong Indo-US partnership is crucial for balancing China’s growing assertiveness in the Indo-Pacific. By mollycoddling Pakistan, our historic rival, Washington injects instability into South Asia’s strategic landscape.


The recent $450m sustainment package for Pakistan’s F-16 fleet was justified on counterterrorism grounds. Pentagon officials even went so far as to describe Pakistan as a ‘reliable partner.’ That same Pakistan, however, was recently elevated to the vice-chair of the UN Security Council’s Counterterrorism Committee—despite decades of tolerating, if not abetting, extremist groups. Such decisions muddy Washington’s credibility and exasperate its democratic allies.


By continuing to equate Pakistan with India, the US undermines its own strategic calculus. India, unlike Pakistan, is a democratic bulwark against Chinese assertiveness in Asia. To lump them together in a Cold War-style balancing act reveals an outdated lens.


Worse still is the fantasy that Pakistan can be peeled away from China. That horse bolted long ago. Pakistan is reliant on Beijing for everything from weapons and infrastructure to bailouts and diplomatic cover. No number of White House banquets will undo that reality.


As for the luncheon itself, many see it as classic Trump: impulsive, optics-driven, and tactically shallow. Reports suggest the two-hour meeting included discussions on counterterrorism and regional peace. But almost immediately after the photo ops ended, Pakistan delivered a sharp rebuke of US airstrikes on Iran, undercutting any illusion of diplomatic alignment. This came just a day after Pakistan had lauded Trump’s role in mediating during recent Indo-Pak tensions, with Munir flattering Trump’s outsize ego by stating the President ought to be nominated for a Nobel Peace Prize. Yet another example of Islamabad’s breathtaking doublespeak.


Pakistan’s tightrope walk is no surprise. With strong ties to Gulf monarchies and a complicated relationship with Tehran, Pakistan cannot afford to alienate either side. Nor can it ignore the consequences of an Iranian collapse. Prolonged escalation in the Middle East, particularly near the Strait of Hormuz, would spike oil prices and plunge Pakistan, already reeling from inflation and power shortages, into deeper turmoil.


There are also deep sectarian undercurrents to consider. Pakistan, a Sunni-majority country with a significant Shiite minority, has long struggled with sectarian tensions. A wider Middle East conflict infused with religious symbolism would be a tinderbox for domestic unrest. Renewed proxy warfare, radical propaganda, or targeted violence are all plausible outcomes should regional tensions escalate.


If sectarian rhetoric takes hold, Pakistan could become a tinderbox. The last thing it needs is imported conflict cloaked in religious symbolism. Trump may view Pakistan as a pliable piece on his global chessboard, but the reality is far messier.


Trump would do well to heed the caution of Senator William Proxmire: “Power always has to be kept in check; power exercised in secret, especially under the cloak of national security, is doubly dangerous.”


(The writer is a retired naval aviation officer and a defence and geopolitical analyst. Views personal)

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