Industry Overview

Chemical Industry

The global chemical industry, integrated with everyday life and essential to sectors ranging from agriculture to automotive, navigated a challenging operating environment in FY 2026 marked by measured growth, weak demand, and macroeconomic uncertainties. Despite these headwinds, the global market reached a valuation of $5.3 trillion in 2025. Recovery remained uneven across geographies. Developed markets like Europe faced high-cost pressures and subdued industrial output, while emerging economies in Asia provided incremental growth support. This regional disparity was compounded by geopolitical friction in the Middle East, which disrupted energy markets and trade routes, escalating input costs and supply chain constraints.

The Indian chemical industry, currently valued at over $200 billion, is projected to grow at a CAGR of 8-9% over the next five years. Growth is expected to be supported by rising domestic consumption, increasing industrialisation, expanding downstream industries and India’s growing role in global supply chains. According to McKinsey, high-growth sectors such as construction, semiconductors, renewable energy and automotive are expected to create additional demand for chemical products and intermediates over the coming years.

Specialty Chemical Market

Global Chemical Market

The global specialty chemicals market continues to witness steady expansion, supported by rising demand from construction, automotive, electronics, agriculture, water treatment, and advanced manufacturing industries. The global specialty chemicals market is estimated at approximately $1.1-1.2 trillion and is expected to exceed $1.5 trillion over the 5-6 years, growing at around 4-5% CAGR.

Demand for high-performance and application-specific chemicals continues to rise across construction chemicals, electronic chemicals, water treatment additives, adhesives, coatings, and specialty polymers. The accelerating transition toward electric vehicles, semiconductor manufacturing, renewable energy infrastructure, and lightweight materials is also creating new avenues for specialty chemical manufacturers globally.

Indian Specialty Chemical Market

India’s specialty chemicals industry continues to witness steady expansion, supported by rising demand across agriculture, automotive, construction, electronics, pharmaceuticals, and consumer industries.

India’s specialty chemicals sector is also benefiting from favourable Government policies, increasing foreign investments, and supply chain diversification strategies adopted by global manufacturers. The “China Plus One” sourcing approach continues to create opportunities for Indian manufacturers to strengthen export participation and integrate deeper into global chemical value chains.

Industry Segments we operate in:

Pharmaceuticals

During FY 2026, the pharmaceutical industry continued to demonstrate resilient volume-led growth, with most players reporting revenue expansion despite margin pressures arising from supply chain disruptions and the impact of patent expiries. Entering FY 2027, the outlook remains positive, supported by healthy end-market demand and increasing CDMO outsourcing opportunities. Patent expiries continue to create a favourable environment for contract development and manufacturing, while the easing of supply chain disruptions has improved operational stability. Additionally, pricing pressure is gradually moderating, leading to a more balanced market environment and supporting improved business visibility across the value chain.

Industrial

During FY 2026, the industrial market remained mixed, with only marginal improvement in volumes amid subdued demand across construction and manufacturing sectors. Margin pressures persisted as weak industrial activity and a challenging demand environment continued to weigh on profitability. In FY 2027, market conditions remain broadly similar, with volume recovery still gradual and margins under pressure across several sectors. However, India has shown encouraging signs of recovery, supported by improving economic activity and infrastructure spending, providing a more constructive outlook for industrial demand going forward.

Nutrition

During FY 2026, the nutrition market witnessed stable-to-improving volume growth, driven by sustained demand for health supplements and functional ingredients. However, profitability remained under pressure due to fluctuations in raw material prices caused by supply chain disruptions. In FY 2027, the market continues to expand, supported by growing consumer focus on health and wellness, which is driving demand across key nutrition segments. While raw material volatility and competitive pricing persist, easing supply chain challenges and improving product mix are gradually supporting margin recovery, resulting in a more favorable operating environment.

Agrochemicals

During FY 2026, the agrochemical sector witnessed a gradual recovery in volumes, supported by demand normalisation across key markets. However, pricing and margins remained under pressure due to intense competition and excess supply from China, which continued to weigh on industry profitability. In FY 2027, the recovery trend has continued, with improving demand supporting further volume growth. Nevertheless, competitive intensity and persistent oversupply from China continue to impact pricing dynamics, keeping margin recovery gradual and maintaining a challenging operating environment for industry participants.

Personal Care

During FY 2026, the cosmetics and fragrance sector remained resilient, delivering stable volume growth, particularly across premium beauty, skincare, and fragrance categories. Profitability remained steady, supported by new product introductions and continued innovation, which accelerated premiumisation trends and enhanced value creation. In FY 2027, the sector continues to witness healthy growth, driven by rising demand for premium skincare products and cosmetic ingredients. Ongoing portfolio innovation and the launch of differentiated products continue to support premiumisation, while stable profitability reflects the sector’s ability to capitalise on evolving consumer preferences and higher-value product offerings.

Electronics & Semiconductors

During FY 2026, the semiconductor market continued to witness strong volume growth, driven by increasing adoption of artificial intelligence (AI), high-performance computing, and advanced electronics applications. While the long-term opportunity remains significant, the market is still at a nascent stage, with extended qualification cycles and long lead times required to scale up commercial volumes. In FY 2027, the momentum has continued, supported by sustained investments in AI infrastructure and next-generation computing technologies. However, the industry remains in the early stages of development, and commercialisation timelines continue to be gradual, with meaningful scale-up expected over the long term.