India’s chemical manufacturers are the most protected sector in the country.

An independent analysis of India’s trade policy during the last five years by the WTO Secretariat shows that 51% of all anti-dumping measures in force are related to chemical or allied industries, and Chinese products have been the top target of such investigations.

“Between 1 January 2021 and 30 June 2025, India notified a total of 226 antidumping investigations to the WTO. Of these, 130 were notified as having resulted in affirmative determinations and in the application of antidumping measures. As of 30 June 2025, India maintained a total of 170 antidumping measures in force. China was the main subject of India’s investigations and antidumping measures in force, accounting for 36.5% and 43.8%, respectively.

“A total of 51% of anti-dumping measures in force pertain to products of chemical or allied industries,” the Trade Policy Review (TPR) report said. The Indian Express had reported last week that the Department for Promotion of Industry and Internal Trade (DPIIT), in a meeting with the petrochemical industry, had asked them to “urgently respond” on the scope to indigenise the production of over 200 highly import-dependent petrochemical items.

These items cumulatively account for annual imports worth over $50 billion, and the missive from the DPIIT, issued Wednesday, comes amid the West Asia crisis that has caused price and supply-related challenges for the industry.

Most petrochemicals listed by the DPIIT were intermediate products that are used in packaging, construction, automotive, agricultural, textile and paints.

Big vs Small

Anti-dumping investigations have been a subject of deep divide between large manufacturers and the downstream sector, as anti-dumping duties typically protect large manufacturers abroad but lead to a surge in input item prices for MSMEs across the sector.

The impact of such duties on the chemical sector particularly translates to high input prices, as chemicals are used in the production of nearly 80,000 downstream products in India, as per Niti Aayog. However, industry sources also say that China’s industrial policies are often designed to scuttle manufacturing abroad.

China, for decades, has been the world’s largest producer and exporter of multiple chemical value chains, from petrochemicals and polymers to fibres and intermediates, posing a challenge for countries globally.

Anti-dumping duties, quality control orders (QCOs) and other such measures are artificial interventions, and MSMEs have to bear the cost as these things make us uncompetitive, Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME) said, adding that these interventions are driven by political motivations and not economic logic. “Anti-dumping duties and QCOs should be the last resort and should be used for a short period of time. But in India, it is used unabated on petrochemicals, plastics and even raw materials such as copper and aluminium.

“Due to these interventions, we have even become a net importer of auto components because raw materials have become expensive,” Bhardwaj said. As per Niti Aayog figures, the chemical base in India has seen erosion due to a surge in cheap imports from China.

According to a report released last year, Niti said that India imported chemicals worth $75 billion compared to exports worth $44 billion, accounting for a trade deficit of around $31 billion.