India Funds ₹600 Crore for Three New Chemical Parks
The Indian government has allocated ₹600 crore in its 2026-27 budget to establish three dedicated chemical parks. This direct funding aims to boost domestic chemical manufacturing, reduce import dependency, and create competitive production clusters. Employing a challenge-based selection for states and a plug-and-play model, these parks will attract fresh investments and enhance self-reliance. The initiative builds on existing industrial policies, striving for improved economies of scale, lower logistics costs, and solidifying India's position as a global chemicals manufacturing hub.
The Indian government has committed ₹600 crore in its 2026-27 budget for the development of three new dedicated chemical parks, marking the first time such infrastructure receives direct budgetary funding. This strategic allocation aims to bolster India's domestic chemical manufacturing capabilities, significantly reduce reliance on imports, and foster the emergence of globally competitive production clusters. Finance Minister Nirmala Sitharaman emphasized that these parks would empower states to strengthen their chemical industries.To ensure swift implementation, the government will employ a challenge-based selection process, allowing states to vie for project approvals. The parks will also adopt a cluster-based, plug-and-play model, providing companies with ready-to-use infrastructure to accelerate their setup and operations. This approach is designed to mitigate project delays and actively draw in new investments into the chemical sector. The initiative is a response to the increasing domestic demand for chemicals across vital industries like pharmaceuticals, agrochemicals, petrochemicals, and specialty materials.By creating these specialized industrial zones, the government anticipates achieving greater economies of scale, reducing logistics costs, and enhancing supply chain efficiency. Furthermore, the parks are expected to stimulate innovation, boost local production, and promote import substitution, thereby strengthening India's self-reliance in critical chemical inputs. This move builds upon existing industrial cluster policies, including the Petroleum, Chemical and Petrochemical Investment Regions (PCPIRs) established in 2007 and the Plastic Parks Scheme launched in 2010–11. With dedicated funding and a focused strategy, these chemical parks are poised to accelerate capacity creation, attract private capital, and reinforce India's standing as a leading global chemicals manufacturing hub, supporting exports and long-term industrial ambitions.
