India’s chemical startups stand to gain transformational growth due to favorable policies, increasing infrastructure investments, and a shift in global supply chains. Two states in India, Maharashtra and Gujarat, are taking the lead. Furthermore, considered the industrial backbone of the country, these states are now transforming into hubs for new‑age chemical manufacturing, entrepreneurial startups, notably in APIs, specialized chemicals, and other important precursors.
For entrepreneurs, particularly in the pharmaceutical industry, this new phase provides considerable strategic and scalable value.
Reducing Import Dependency on APIs
To reduce reliance on imported APIs and intermediaries, public and private stakeholders are enhancing domestic capacities. These two states also have an existing competitive advantage because of their policy frameworks, established industrial corridors, and access to export markets, making these regions the most suitable to start or grow chemical businesses.
India’s Chemical Industry in 2025: An Insightful Overview
Because of the rapid expansion, India’s chemical industry ranks among the fastest-growing industries globally. It adds more than 7% to India’s GDP and is projected to reach USD 304 billion by the end of 2025. The need contributes to this growth for chemicals in the industries of pharmaceuticals, agriculture, food processing, water treatment, textiles, and many more.
Between all the categories, the pharmaceuticals and specialty chemicals sectors are expected to experience the highest growth rate due to global realignment of supply chains and increased domestic consumption.
As per the reports issued by the Department of Chemicals and Petrochemicals, India’s chemical exports are estimated to exceed USD 36 billion in FY 2024 and are set to increase at a 9-11% yearly growth rate for the next 5 years.
There are huge export potential opportunities for India, especially in the pharmaceutical sector due to the exodus of China-centered supply chains.
Table 1: Projected Growth of Vital Chemical Segments (2025)
| Segment | Estimated Market Size (USD Billion) | CAGR (2020–2025) |
| Bulk Chemicals | 87 | 6.4% |
| Specialty Chemicals | 70 | 11.2% |
| Agrochemicals | 14 | 8.6% |
| APIs & Intermediates | 25 | 13.1% |
| Petrochemicals | 108 | 10.1% |
This increase is additionally bolstered by PLI schemes for chemicals and APIs, as well as policies which promote the domestic production of key starting materials (KSMs). These trends are demand-driven as well as policy-driven, benefitting primarily Maharashtra and Gujarat.
Related: Opportunities for Startups in India’s Chemicals Sector
What Explains the Leadership of Gujarat and Maharashtra
Emerging as leaders within India’s overall push to enhance its chemical production capabilities, Gujarat and Maharashtra have gained an advantage for multiple reasons. These reasons include strong chemical infrastructure and industrial clusters, a favorable policy framework, availability of skilled workforce, and port access.
Gujarat, for example, having more than 30% of India’s chemical production, accommodates industrial estates like Dahej PCPIR, Vapi, Ankleshwar and Jhagadia. These zones are incredibly supportive for a chemical startup’s bottom line, offering ready-to-use land, effluent treatment facilities, and solvent recovery units. Dahej PCPIR is a case in point having set the standards for cluster-based development due to its proximity to Kandla and Mundra ports.
On the other hand, the pharmaceutical hubs of Tarapur, Taloja, Lote, and Aurangabad give Maharashtra an added edge. It has always been a top contender for chemical exports and contributes nearly 20% to India’s chemical revenue. The MIDC industrial estates provide chemical industries of all sizes with integrated and unified infrastructure.
What stands out as differentiating both states is the ease of regulations. Both Gujarat and Maharashtra have adopted one-stop-shops for gaining rapid environmental clearances, land permissions, and tax benefits. These steps taken simplify the cumbersome processes significantly for the manufacturing units to start operations.
Boost in API Manufacturing: A Strategic Shift
The surge in the manufacturing of APIs and chemicals is remarkable, sharply shifting growth opportunities for chemical startups. The pandemic brought to light India’s supply chain vulnerabilities as India heavily relied on Chinese suppliers for APIs, especially for antibiotics and life-saving drugs. In 2020, over 65% of the APIs consumed in India came assiduously depended on Chinese suppliers.
In response to this strategic gap, the Indian government has been encouraging the local production of APIs. Under the PLI scheme for APIs, which has a budget of close to INR 6,940 crore, dozens of greenfield units have already been approved in Gujarat and Maharashtra. These incentives focus on important high-value molecules, including Penicillin, Ibuprofen, and Atorvastatin.
Projected Growth in API and Intermediate Sector (2025–2030)
| Year | Domestic API Demand (INR Crore) | Export Revenue Potential (INR Crore) |
| 2025 | 150,000 | 100,000 |
| 2026 | 170,000 | 115,000 |
| 2027 | 192,000 | 132,000 |
| 2028 | 217,000 | 151,000 |
| 2029 | 245,000 | 172,000 |
| 2030 | 275,000 | 195,000 |
Gujarat and Maharashtra’s strong backward and forward linkages make them ideal for API production. With its strong petrochemical base, Gujarat provides the upstream chemical feedstocks, while Maharashtra has a mature downstream formulation industry that consumes these APIs, providing a ready domestic market.
How Manufacturing Is Set Up: A Process Overview
Setting up a chemical or API manufacturing facility requires several distinct processes starting from site selection and regulation approval to raw material procurement, process engineering, and waste management.
The processes involved in setting up an API unit differ in complexity based on the molecule type, however, the methods align on:
Chemical Synthesis:
Reaction sequences are carried out in batch or semi-batch reactors with the use of reagents, solvents, and catalysts. Processes like chlorination, alkylation, esterification, or hydrogenation may be employed.
Separation and Purification:
Filtration, centrifugation, and crystallization. High purity APIs require additional purification steps, which may involve chromatography or distillation.
Drying and Milling:
Fluidized bed drying and vacuum drying are methods that can be used to discharge residual solvents. Thereafter, the particles are milled and sieved to targeted sizes.
Compliance and Packaging:
Final testing is done as per Indian Pharmacopoeia (IP), US Pharmacopoeia (USP), or British Pharmacopoeia (BP). This is followed by regulatory submission, cleanroom packaging, and compliance documentation.
Effluent Treatment and Safety Systems:
Compliance with environmental regulations is very important. It is common to have Zero Liquid Discharge (ZLD) systems in place, particularly within red-category zones.
Both the Maharashtra Pollution Control Board (MPCB) and Gujarat Pollution Control Board (GPCB) ensure that MSMEs practice emission control along with waste treatment for environmental compliance.
Related: Startup Alert: Chemical Products in High Global Demand with Local Production Potential
Export Ecosystem and Global Reach
Chemical startups in these states have international market access, which stands as a significant advantage. Over 52% of India’s chemical exports come from Gujarat due to its coastal belt and modern port facilities.
Maharashtra complements this with strong road and air connectivity and the Nhava Sheva port (JNPT), one of the major pharmaceutical cargo ports in the country.
Both states are also appealing to foreign buyers, particularly from the US, EU, and Southeast Asia, because of the FDA-approved manufacturing units located there. These states have export-oriented units (EOUs) that are known to provide expedited regulatory clearances and tax incentives within SEZ borders.
The Road Ahead: Trends and Innovation Outlook
Chemical startups in Maharashtra and Gujarat are forecasted to undergo diversification alongside digitization from 2025 to 2030. Focus areas include:
- Green chemistry and bio-based solvents
- Batch processes monitored digitally and IoT integration
- R&D parks specializing on custom synthesis, CRAMS (Contract Research And Manufacturing Services), and other tailored services
- Circular chemical economy with an emphasis on solvent and effluent recovery along with reuse.
Startups that align their product strategies with environmental sustainability, regulatory compliance, and smart manufacturing will be better positioned to scale and attract global partnerships.
Watch video on related chemicals for more information
How NPCS Supports Chemical Entrepreneurs
Niir Project Consultancy Services (NPCS) provides comprehensive support to startups and entrepreneurs planning to enter the chemical manufacturing domain.
- NPCS prepares Market Survey cum Detailed Techno Economic Feasibility Reports tailored to the chemical and API sector.
- Their reports cover manufacturing processes, raw materials, plant layout planning, and detailed financial analysis.
- NPCS helps entrepreneurs assess the technical and commercial viability of proposed projects, facilitating informed decision-making and project execution.
Conclusion
In 2025, Maharashtra and Gujarat represent more than just chemical manufacturing zones—they are evolving into innovation corridors for the next generation of pharma and chemical entrepreneurs. With mature infrastructure, policy momentum, and strong global integration, these states offer a future-ready platform for startup success. Entrepreneurs looking to create scalable ventures in APIs, intermediaries, or specialty chemicals will find in these regions not only opportunity but a complete industrial ecosystem primed for accelerated growth.
By investing in quality, sustainability, and regulatory excellence, startups in Maharashtra and Gujarat can play a pivotal role in India’s transformation from a chemical importer to a global chemical powerhouse.