The chemical industry, one of the oldest in India, serves as a catalyst to the country’s economic and industrial growth owing to its back and forth connections to various mainstream industries. Substantial expansion of the industry since many decades has made India its 3rd largest manufacturer in Asia and 6th largest in the world with respect to output. The chemical industry currently, contribution to the economy’s GDP and manufacturing GDP stands at 2.11% and 15% respectively, the government aspires to take the figure to 25% by 2025, a year by which the industry is projected to reach USD304 billion by the year 2025.
India enjoys a structural advantage in terms of increasing population, rapid urbanization, higher demand and consumption of chemical-based products. All of them acting as essential growth drivers behind the chemical industry in India. The relatively low per capita average consumption of chemicals when compared to Western countries also indicates a huge scope for industrial growth. Correspondingly, flexible government policies, relaxation of environmental norms for the chemical industry, and permission for 100% foreign investments are drawing an enormous sum of FDI in the sector and leading to its enlargement.
As the industry is expanding, so are the risks connected with it. The industry is prone to natural and man-made misfortunes; industrial hazards that can adversely impact employee and environmental health; product-related risk, volatile supply chain management risk, and many others. Since the risks associated spread much beyond financial losses and can cause serious loss of life and environmental issues, the companies are required to cover themselves adequately through an ideal insurance strategy.
