India Seeks RDI Scheme Support for Chemical and Petrochemical Industry

India’s chemical and petrochemical industry could gain greater access to research and innovation financing if the sector is brought under the country’s Research, Development and Innovation (RDI) Scheme.

The Department of Chemicals and Petrochemicals is pursuing discussions with the Department of Science and Technology (DST) to have chemicals and petrochemicals recognised as a priority sector under the RDI framework. The development could create new opportunities for companies to invest in advanced technologies, product development and higher-value chemical manufacturing.

Why RDI Support Matters for the Chemical Industry

The RDI Scheme was approved with a total outlay of ₹1 lakh crore to encourage greater private-sector participation in research and development and strengthen India's technological capabilities.

The scheme is designed primarily to support high-impact and high-risk innovation through long-term financing, including low-interest financing and, in appropriate cases, equity support. The framework is intended to promote technologies that can strengthen India's technological self-reliance and economic security.

For the chemical industry, this type of support could be particularly relevant because developing new molecules, production processes, advanced materials and sustainable technologies often requires significant investment before commercial-scale returns are achieved.

Potential Benefits for Chemical Manufacturers

If chemicals and petrochemicals are brought within the priority areas of the RDI Scheme, manufacturers could potentially benefit across several areas.

Development of Advanced and Specialty Chemicals

Greater R&D financing could encourage companies to move toward higher-value specialty chemicals, performance materials and application-specific products rather than relying primarily on established commodity products.

This could help Indian chemical manufacturers participate more deeply in global chemical value chains.

New Production Technologies

Chemical manufacturing increasingly depends on process efficiency, automation, advanced catalysts, energy optimisation and improved production technologies.

Access to long-term innovation financing could make it easier for companies to develop and commercialise technologies that improve productivity, reduce costs and increase manufacturing efficiency.

Import Substitution and Technology Development

A stronger domestic R&D ecosystem could also help reduce dependence on imported technologies, intermediates and specialised chemical products.

The RDI framework specifically seeks to support technologies where indigenisation is important for strategic or economic security. This creates a potential connection with India's broader objective of strengthening domestic chemical supply chains.

Sustainable and Low-Carbon Chemistry

The chemical industry is under increasing pressure to reduce energy consumption, emissions, waste and environmental impact.

R&D support could accelerate work on areas such as cleaner production processes, resource efficiency, recycling, carbon-management technologies, bio-based chemicals and other sustainable manufacturing solutions.

This is particularly important as Indian chemical manufacturers compete in markets where environmental performance and technology standards are becoming increasingly important.

Stronger Industry–Research Collaboration

A stronger RDI framework could also encourage closer cooperation between chemical manufacturers, technology developers, research institutions and startups.

Such collaboration can help move technologies from laboratory research toward pilot-scale development and eventually commercial production.

The RDI framework is designed around technology development and private-sector participation, with support focused on projects generally at Technology Readiness Level (TRL) 4 and above.

Opportunity for Specialty Chemical Manufacturers

The potential inclusion of chemicals and petrochemicals is particularly significant for India's specialty chemical industry.

Specialty chemical companies often need continuous investment in formulation development, process optimisation, application research and new product development. A stronger financing ecosystem could help more Indian companies move from contract manufacturing and intermediate production toward proprietary products and technologies.

This could also support India's ambition to become a more important global supplier of specialty and advanced chemical products.

Supporting India's Larger Chemical Manufacturing Strategy

The proposed RDI support would complement other government initiatives aimed at strengthening the chemical sector.

For example, the BHAVYA Rasayan Scheme is focused on developing dedicated Chemical Parks with common infrastructure and plug-and-play facilities, while the RDI Scheme is focused on strengthening research, technological development and private-sector innovation.

Together, infrastructure and technology support could address two important requirements for the industry's next phase of growth:

better manufacturing infrastructure + stronger domestic technology development.

What It Could Mean for India's Chemical Industry

If the chemicals and petrochemicals sector is formally brought under the RDI priority framework, the potential benefits could extend beyond individual companies.

A stronger innovation ecosystem could contribute to:

• Development of higher-value chemical products

• Greater domestic manufacturing of strategic chemicals and intermediates

• Reduced dependence on imported technologies and products

• Increased investment in process and product innovation

• Faster commercialisation of new chemical technologies

• Growth of specialty and advanced-material segments

• Stronger collaboration between industry, startups and research institutions

• Improved global competitiveness of Indian chemical manufacturers

However, the sector's inclusion is still being pursued and should not be treated as a completed policy decision. The next important step will be how the government evaluates the sector's R&D requirements and whether chemicals and petrochemicals are formally included within the RDI priority framework.

ChemEnrich Industry View

India's chemical industry has already entered a phase where manufacturing capacity alone may not be enough to compete globally. Developing proprietary technologies, advanced materials, efficient processes and differentiated chemical products will become increasingly important.

Bringing chemicals and petrochemicals into the RDI framework could therefore provide an important opportunity to connect industrial manufacturing with long-term technology development.

For Indian chemical manufacturers and specialty chemical companies, the biggest potential value would be the ability to undertake higher-risk R&D and move promising technologies from development toward commercial production.

If implemented effectively, stronger R&D financing could help India progress from being primarily a large chemical manufacturing base toward becoming a technology-driven and innovation-led chemical industry.

Sources: FICCI, Press Information Bureau (Government of India), Department of Science & Technology, and government policy disclosures.