New Delhi [India], February 20 (ANI): India's agrochemical industry is witnessing growing demand in Europe, supported by a regulatory environment that increasingly favours Indian exports, according to a recent report by Nuvama.

The report highlights that the small-molecule pharmaceutical research industry is also expanding in India, benefiting from shifting market dynamics in Europe.

It said, 'India's agrochemical industry too is gaining traction in Europe, supported by a regulatory environment that increasingly favours Indian exports'

The report noted that Europe's competitive advantage in the chemical sector is gradually eroding, creating opportunities for India to strengthen its position in key segments.

India is rapidly scaling up production in fine chemicals, agrochemicals, and specialty chemicals, driven by government incentives and lower production costs. Many multinational companies are also shifting their manufacturing operations to India, further reducing Europe's dominance in the sector.

As per the report, one of the major factors contributing to this shift is Europe's increasing reliance on chemical imports from India and China.

With local production becoming less competitive, Europe is transitioning from a chemical manufacturing hub to a more import-dependent region. The trend has accelerated over the past year, with significant capacity closures across the European chemical industry.

The report also highlighted that in 2023-24 alone, around 11 million tons of chemical manufacturing capacity were shut down in Europe. More than 21 major chemical plants have closed, marking a tenfold increase compared to historical averages.

It also pointed out that once these plants shut down, they do not reopen, leading to a permanent decline in Europe's industrial base.

With Europe struggling to maintain its position in the global chemical market, India is emerging as a key supplier. The country's ability to produce chemicals at a lower cost, along with favourable government policies, is making India a preferred destination for chemical production.

As Europe continues to shift towards being a net chemical importer, Indian companies have a strong opportunity to expand their global market share in the agrochemical and speciality chemical sectors. (ANI)