Indian Chemical Companies Face Pressure from Chinese Dumping and US Tariffs
Indian chemical companies are grappling with challenges from Chinese dumping and uncertain US tariffs. Chinese overcapacity and aggressive pricing are hurting margins, while US tariff policies add further uncertainty. The sector shows resilience in volumes, but profitability remains under pressure.
Indian chemical manufacturers are facing significant headwinds due to Chinese dumping and ongoing uncertainty surrounding US tariffs. Chinese dumping refers to the sale of chemical products at artificially low prices, which creates unfair competition and pushes down market prices for Indian companies. The Indian government has responded by imposing anti-dumping duties on several Chinese chemical products to protect domestic industry. The impact of Chinese overcapacity and dumping is most severe in segments such as phenolics, advanced intermediates, packaging films, and technical textiles, affecting companies like SRF Chemicals, Deepak Nitrite, and Atul. Heavy destocking in the agrochemical segment has also hurt Deepak Nitrite’s Advanced Intermediate business, while US tariff uncertainties have weighed on companies like ARTO Chemicals and SRF. Customers are delaying procurement decisions due to pricing and trade policy uncertainty. Despite these challenges, the sector has shown resilience in volumes during the second quarter and first half of FY26, even amid difficult global and domestic macroeconomic conditions, rising geopolitical tensions, and sudden shifts in global trade policies. However, aggressive pricing strategies and steep dumping from China continue to pressure margins across both commodity and specialty chemical segments. While short-term challenges persist, the sector’s resilience in volumes and profitability offers some relief.
