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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.

Water Wars and the New Frontier of Geopolitics

As fresh blood stains Kashmir, India turns to the rivers to hit back at Pakistan.

The aftermath of the gruesome terrorist attack in Pahalgam, which claimed the lives of 27 innocent civilians, has seen India respond with unusual force and clarity. Among the five punitive measures announced, the most significant was New Delhi’s decision to suspend the Indus Waters Treaty (IWT) of 1960, an agreement often hailed as one of the few lasting successes of India-Pakistan diplomacy. This move signals not only India’s anger at Pakistan’s continued harbouring of terrorists but also a recognition of a larger, more elemental reality that in the 21st century, water is fast becoming a geopolitical weapon.


India’s reaction has been precise. As Pakistani army chief Asim Munir fanned anti-Hindu sentiments and repeated his claim that Kashmir is Pakistan’s “jugular vein,” New Delhi touched the true jugular - water. Declaring the treaty suspended “until Pakistan credibly and irrevocably abjures its support for cross-border terrorism,” India made its position plain. As Water Resources Minister C.R. Patil stated after a joint review meeting with Home Minister Amit Shah, “A road map has been prepared… The government is working on short, medium and long-term measures so that not even a drop of water goes to Pakistan.” It is a historic decision, officials proclaimed, one that is “completely justified and in the national interest.”


Predictably, Pakistan reacted with fury. Islamabad denounced the move as a “unilateral suspension” and “illegal,” warning that stopping river flows would be seen as an act of war. Foreign Minister Bilawal Bhutto added his own incendiary note: “Either our water will flow or their blood.” The rhetorical escalation is alarming, but also telling. It confirms that in the subcontinent and beyond, water is no longer merely a resource; it is a flashpoint.


Water scarcity is set to define global geopolitics. The United Nations estimates that by 2035, nearly a third of the world’s population will live under conditions of severe water stress. As the Pacific Institute, a US-based research body, has catalogued, there were at least 1,473 incidents of water-related violence between 1990 and 2023, skirmishes that stretch from the deserts of the Middle East to the rice paddies of Asia. Water, once assumed to be a renewable blessing, is increasingly becoming a contested, finite prize.


The Indo-Pakistani rivalry has long had a watery undercurrent. Some historians argue that Pakistan’s 1965 assault on India’s Kashmir was motivated less by ideology and more by a desire to capture the headwaters of the Indus river system. Elsewhere, disputes over water have shaped history in quieter but no less significant ways: the Six-Day War of 1967 had its roots, in part, in the struggle between Israel, Jordan and Syria for control of water sources. Tensions between Egypt and Ethiopia today over the Grand Ethiopian Renaissance Dam on the Nile echo older disputes about access and sovereignty. Even the United States and Mexico, allies more often than not, have tussled over the Rio Grande and the Colorado River. In Central Asia, the break-up of the Soviet Union unleashed a series of bitter arguments between Uzbekistan, Kyrgyzstan and Tajikistan over shared water resources.


India itself is no stranger to water wars at home. Inter-state disputes over the Cauvery River in southern India and the Ravi-Beas system in the north have triggered political crises and civil unrest. Nor is India immune to external pressures. China, now Asia’s dominant hydro-hegemon after its annexation of Tibet, is building massive dams across rivers like the Brahmaputra that threaten to choke water flows into northeast India. Meanwhile, India’s failure to resolve a long-delayed water-sharing treaty with Bangladesh over the Teesta River has fed anti-India sentiment in Dhaka.


What emerges from this watery landscape is a stark reality: cooperative water-sharing arrangements depend on mutual trust, transparency, and the rule of law. When authoritarian, revisionist or terror-sponsoring states are involved, agreements are fragile at best. India’s suspension of the Indus Waters Treaty is thus not just a reaction to a heinous act of terror; it is a recognition that conventional frameworks of diplomacy fail when faced with persistent bad faith.


The suspension will not be easy to implement. The IWT has endured wars and crises for more than six decades, largely because it is seen as serving both nations’ vital interests. Abruptly altering river flows risks environmental harm, domestic political fallout, and potential military escalation. Yet doing nothing would be worse. If Pakistan continues to bleed India by a thousand cuts through its proxies, New Delhi’s patience will naturally ebb, much like the waters Pakistan now so anxiously seeks to preserve.


Ultimately, yesterday’s wars were fought over land. Today’s conflicts revolve around energy. Tomorrow’s battles will be over water. India’s move to suspend the Indus Waters Treaty may thus mark not merely an escalation with Pakistan, but a glimpse of the future: a world where rivers, not borders, determine the fate of nations.


In this grim new reality, strength, foresight and resilience will be essential. As the rivers of Asia, Africa and the Americas run thinner, the world must prepare not only for water scarcity, but for water wars.


(The author is a veteran journalist based in Navi Mumbai. Views personal.)

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