Gujarat, Jul 1 (KNN) Gujarat's chemical industry, responsible for 75 per cent of India's chemical manufacturing, is showing signs of recovery after a challenging year.

Despite a 14 per cent drop in chemical exports in FY 2024, recent data indicates a 2.8 per cent increase in exports for April and May 2024 compared to the same period last year.

Industry experts are predicting a 7-9 per cent growth for FY 2025, driven by a resurgence in both domestic and international demand. This optimistic forecast comes as a relief to the sector, which has been grappling with significant challenges in recent months.

The specialty chemicals sector, which comprises 21 per cent of the domestic industry, is expected to see margin rebounds. This segment had previously suffered from major erosion due to costlier inventories and declining product realisations, but experts now anticipate a turnaround.

A notable improvement has been observed in capacity utilisation, particularly in Ahmedabad-based chemical units. These facilities have seen their operational capacity increase from 50 per cent to 70 per cent, signalling a positive trend for the industry's recovery.

The agrochemicals segment is experiencing a surge in demand, both domestically and globally. This increased demand is partly attributed to supply chain disruptions, which have resulted in more orders for Indian manufacturers.

Despite these positive indicators, challenges remain for the industry. Export difficulties persist, and the ongoing impact of the Russia-Ukraine war continues to affect global markets. However, the Indian market is offering new opportunities for chemical manufacturers.

Government schemes are playing a crucial role in supporting the sector's growth. Additionally, India's cost advantages in land, labour, and common facilities are improving the global competitiveness of its chemical industry.

Industry leaders express cautious optimism, citing improved demand, stabilising raw material prices, and decreasing inventory levels. However, they note that full recovery may take another two quarters.

The chemical sector's revival is crucial for Gujarat's economy and employment, with the industry having faced significant job losses in the past year. As global economic conditions stabilise, the sector looks poised for a gradual but steady recovery.

(KNN Bureau)