The largest single trade flow in the India-Europe corridor, now moving through a new tariff-free lane.
Book a 30-minute callEuropean manufacturers looking at India's chemical sector are looking at one of the few industries where the government allows 100% foreign direct investment through the automatic route, no prior approval needed. The pull is scale: the market sits above $250 billion today and is on a path toward $1 trillion by 2040, with specialty chemicals and agrochemicals growing fastest. Manufacturing concentrates heavily in Gujarat and Maharashtra, where the plant infrastructure, port access and skilled labour pool already exist. The open question for most entrants isn't whether to come, it's whether to build a plant, license to a local partner, or set up a formulation and blending operation first while demand proves out.
For Indian exporters, organic chemicals are already the largest single chemical export line into the EU, worth close to $2.75 billion in just the first four months of a recent fiscal year. The new India-EU trade agreement removes tariffs on 97.5 percent of that export basket by value, some of which previously carried duties as high as 12.8 percent. That tariff relief is real money, but it doesn't touch the actual gate to the market, which is REACH registration. A zero-duty shipment that isn't REACH-compliant still doesn't clear customs.
Certain chemical product categories, including specific paints and industrial chemicals, fall under mandatory BIS certification (IS 15489 and related standards) before they can be sold in India. Most chemical manufacturing itself sits on the 100% automatic FDI route, so the regulatory friction is usually at the product-certification level, not at the ownership level.
REACH registration is the actual compliance gate for chemicals entering the EU, and it runs entirely independently of the new tariff agreement. Chemicals are not currently inside CBAM's scope, that mechanism covers iron and steel, aluminium, cement, fertilisers, hydrogen and electricity, not chemicals, though it's worth knowing the EU retains the power to expand that list.