Chemical Logistics: Challenges and Growth Opportunities

16 Jun, 2022 2:47:04 PM / by Transport Corporation of India Ltd


Chemical Industry Outlook


The Indian chemical industry ranks as 6th largest in the world and 3rd largest in Asia, contributing nearly 3% of the total global chemical industry. The industry has grown rapidly in last five years, currently standing at USD 163 billion. It has the potential to reach around USD 304 billion by 2025, growing at a CAGR of 9.3% till then. The sector employs more than 2 million people and accounts for 7% of India’s GDP by value.


This industry is highly diverse in terms of the number of products it covers with an array of applications across a wide range of categories. Products exist in all forms – solid, liquid and gaseous with some possessing highly inflammable and “hazardous” properties. Pertaining to their chemical and

physical properties, each product requires specific handling, storage and transportation


Key subsectors include:


  • Agrochemicals

India is the 4th largest producer of agrochemicals and 13th largest exporter of pesticides and disinfectants in the world. It stands at USD 6.3 billion, with domestic demand growing by 6.5% annually.


  • Specialty Chemicals

The specialty chemicals market currently stands at USD 70 billion and is likely to clock a compounded

annual growth rate of 12-13 % over the next 5 years. All key segments of specialty chemicals are set for

double digit growth in coming years, including a CAGR of 13% in personal care and 10% in paints and coatings.


  • Petrochemicals

The petrochemical market in India is expected to grow at a CAGR of over 10% in the next 5 years and reach around USD 100 billion by 2022. Combining the demand for all the key segments in the petrochemical industry, aggregate demand for the entire petrochemical sector in India

has reached to 48 MMT in 2020-21.


Critical Nature of Chemical Logistics


During the second wave of COVID-19 in India, the Union ministry of road transport and

highways asked states and union territories to create a pool of drivers trained especially to

transport ‘hazardous cargo’ amid an increase in transportation and supply of liquid medical

oxygen. As per ministry’s statement issued in May’21, only trained drivers with adequate

training and having ‘hazardous cargo’ license would be allowed to operate the Liquid

Medical Oxygen (LMO) trucks.


This is one of the recent examples that demonstrate the highly critical nature of Chemical

Logistics; and how it differs itself from many other logistics disciplines because of the

potential danger posed by the cargo and its impact on health, safety, security, and the

environment (HSSE).


Dangerous goods can be transported only if handled properly and with care. All DG

containers have to be checked for proper label/placard as required by the IMDG code and

shall be rejected if it poses hazard prior loading. DLDS [(DMIDC) Logistics Data Services

Ltd.] provides digital container tracking solution that helps reduce logistics cost from

present 14% of the GDP to international standards of 8%.


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Topics: Everything Logistics