India’s inorganic chemicals exports projected to top imports by FY28

India’s inorganic chemicals exports are projected to exceed imports by FY28 on a volume basis, reversing the import-led position reported through FY24. Exports rose from 417 thousand metric tonnes in FY24 to 499 thousand metric tonnes in FY25, while imports declined from 942 thousand metric tonnes to 928 thousand metric tonnes.

Why are inorganic chemicals exports projected to top imports by FY28?

Inorganic chemicals exports are projected to top imports by FY28 because domestic production capacity, backward integration and import substitution are expected to increase export supply while imports decline gradually. The forecast concerns physical trade volume in thousand metric tonnes, not the rupee value of trade, and follows FY20 to FY24, when imports remained higher than exports.

The report attributes the expected change to capacity additions, particularly in caustic soda and soda ash, and to greater self-sufficiency in domestic production. Backward integration means manufacturers bring inputs or earlier stages of production into their own operations, reducing dependence on outside suppliers. The report also links the forecast to the Atmanirbhar Bharat domestic-manufacturing initiative and global supply-chain diversification, which is raising demand for Indian suppliers.

Exports increased by 82 thousand metric tonnes between FY24 and FY25, while imports declined by 14 thousand metric tonnes. The difference between imports and exports therefore narrowed from 525 thousand metric tonnes in FY24 to 429 thousand metric tonnes in FY25. Imports still exceeded exports in FY25, so the FY28 crossover remains a projection that depends on the forecast trend continuing.

What changed in inorganic chemicals trade during FY25?

Inorganic chemicals trade changed in FY25 because export volumes rose while import volumes moderated. Exports increased 19.7% from 417 thousand metric tonnes in FY24 to 499 thousand metric tonnes in FY25, whereas imports fell 1.5% from 942 thousand metric tonnes to 928 thousand metric tonnes. The report attributes the movement to improving domestic production capabilities, capacity additions and stronger overseas demand.

The physical-trade trend differs from the reported rupee-value data for a narrower product set. Combined trade under Harmonized System, or HS, codes 28321010, 28321090 and 28322090 recorded exports of Rs 31 crore in FY21, Rs 192 crore in FY24 and Rs 166 crore in FY25, with FY25 covering April to January. The source says exports recovered to Rs 189 crore in FY26 as export demand improved and global trade normalised.

Imports of the selected HS-code group rose from Rs 18 crore in FY21 to Rs 106 crore in FY26. These imports include raw materials, intermediates and high-purity inorganic chemicals that are not manufactured in sufficient domestic quantities. A volume-based export surplus for the broader category would therefore not mean that imports of specialised grades or chemical inputs end.

How does capacity support the FY28 export forecast?

Production and installed capacity are forecast to rise through FY30, creating the supply base required for an export-volume crossover in FY28. Production increased from 1,063 thousand metric tonnes in FY20 to 1,197 thousand metric tonnes in FY25 and is projected to reach 1,389 thousand metric tonnes by FY30. That FY25-to-FY30 increase equals 192 thousand metric tonnes.

Installed capacity is projected to expand from 1,650 thousand metric tonnes in FY25 to 1,776 thousand metric tonnes by FY30. Capacity utilisation, which measures output as a share of installed capacity, is forecast to rise from 72.5% to 78.2% over the same period. The export forecast therefore requires both additional capacity and higher use of that capacity as domestic and overseas demand develops.

Projected FY30 production of 1,389 thousand metric tonnes remains 387 thousand metric tonnes below projected installed capacity of 1,776 thousand metric tonnes. This difference indicates potential output headroom, but it can be used only if manufacturers have adequate feedstocks, operating efficiency and customer demand. The report specifically identifies caustic soda and soda ash expansions as mechanisms to reduce import dependence.

Could domestic consumption delay the export crossover?

Domestic consumption could delay the export crossover if it grows faster than production available for export. Consumption declined from 1,662 thousand metric tonnes in FY24 to 1,625 thousand metric tonnes in FY25, a decrease of 37 thousand metric tonnes. The report attributes the decline to production efficiency, greater recycling and substitution by alternative chemicals in certain applications.

The report also says rising global demand directed a larger share of domestic production towards international markets in FY25. Lower reported consumption and higher exports therefore occurred together as the import-export gap narrowed by 96 thousand metric tonnes. For the FY28 forecast to persist, production growth must continue to exceed demand from domestic users as well as imported inputs that remain necessary.

Domestic demand spans water treatment, fertilisers, construction, chemicals, electronics and specialty manufacturing. The source cites fertiliser sales of about 64.7 million tonnes in FY24 and more than Rs 2.5 lakh crore of construction and allied infrastructure investment under the National Infrastructure Pipeline in FY24. These end-use channels can increase requirements for inorganic chemical inputs even as exporters seek additional overseas volume.

What risks remain for inorganic chemicals exports?

Imported elemental sulphur remains a risk for sulphur-based inorganic chemicals because India depends structurally on overseas sulphur to bridge domestic supply and industrial demand. Sulphur is a feedstock for sulphuric acid and products including sodium metabisulphite, sodium bisulphite, sodium sulphite and ammonium bisulphite. This dependency can affect manufacturing costs despite broader improvements in inorganic chemical trade volumes.

The report identifies Middle East conflict and disruption in the Red Sea and Strait of Hormuz as factors that have raised sulphur and sulphuric-acid prices, lead times, freight costs and marine-insurance costs. It says these disruptions have not caused a structural shortage of sulphur, but they have increased feedstock-price volatility and procurement risk. Commodity-grade producers may face constraints where higher input costs cannot be fully reflected in selling prices.

The source identifies diversified import sourcing, integrated refining capacity and an established chemical manufacturing ecosystem as factors supporting resilience. However, the FY28 crossover is not a reported outcome. It requires capacity additions, rising utilisation, sustained export demand and availability of essential imported feedstocks to develop broadly as projected.

Conclusion

The projected shift to export volumes exceeding import volumes by FY28 follows a measurable FY25 narrowing in the trade gap, from 525 thousand metric tonnes to 429 thousand metric tonnes. Rising production, capacity additions and higher utilisation provide the basis for the forecast, while the separate HS-code data show that imports of inputs and high-purity grades can continue alongside broader export growth.

The next indicators are whether export volume rises beyond 499 thousand metric tonnes and imports continue to decline after FY25. The report’s FY30 projections of 1,776 thousand metric tonnes of installed capacity and 78.2% utilisation, along with sulphur availability and freight conditions, will determine whether the expected FY28 crossover is sustained.