CCEA approves three dedicated Chemical Parks with Centre-State contributions

The approval of the Bharat Audyogik Vikas Yojana Rasayan (BHAVYA-Rasayan) Scheme by the Cabinet Committee on Economic Affairs (CCEA) marks a watershed moment in India's quest for industrial self-reliance in the chemical sector. Announced in the Union Budget 2026-27 and formally approved in 2025, this scheme aims to establish three dedicated Chemical Parks across the country through a Centre-State partnership model. To understand its significance, we must first appreciate the context: India's chemical industry, currently the sixth largest globally and third largest in Asia, contributes approximately 7% to the national GDP and employs over 2 million people. Yet, the sector faces a structural deficit — India imports over 40% of its chemical requirements, particularly in specialty chemicals and petrochemical intermediates, leading to a trade deficit exceeding $20 billion annually. The BHAVYA-Rasayan Scheme directly addresses this vulnerability by creating world-class infrastructure — common effluent treatment plants, power substations, logistics hubs, and R&D centres — within designated parks, thereby reducing capital expenditure for individual units and ensuring environmental compliance. The constitutional framework underpinning this initiative is rooted in the Seventh Schedule of the Constitution. While 'Industries' falls under the State List (Entry 24), 'Industries declared by Parliament by law to be necessary for defence or for the prosecution of war' (Entry 7, Union List) and 'Regulation and development of oilfields and mineral oil resources' (Entry 53, Union List) give the Centre significant leverage. The scheme leverages cooperative federalism — a principle reinforced by Article 263 (Inter-State Council) and the spirit of the GST Council model — where states contribute land and local clearances while the Centre provides viability gap funding and central infrastructure. This mirrors the successful model of the Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) launched in 2007, but with a sharper focus on dedicated chemical ecosystems rather than broad investment regions. Key stakeholders include the Department of Chemicals and Petrochemicals (under the Ministry of Chemicals and Fertilizers), state industrial development corporations, the Ministry of Environment, Forest and Climate Change (for Category A clearances), and private anchor investors. The involvement of Ashwini Vaishnaw, Minister of Information and Broadcasting (also holding Railways and Electronics & IT), in announcing the scheme underscores its cross-sectoral importance — linking chemical manufacturing to downstream sectors like pharmaceuticals, agrochemicals, textiles, and electronics. Economically, the scheme targets $50 billion in incremental investments and 5 lakh direct and indirect jobs by 2030. It aligns with the Production Linked Incentive (PLI) schemes for advanced chemistry cells and pharmaceutical intermediates, creating a synergistic policy stack. Strategically, reducing dependence on Chinese chemical imports — which accounted for 45% of India's chemical imports in 2023-24 — enhances supply chain resilience, a priority highlighted during the pandemic and recent geopolitical tensions. Environmentally, the parks will enforce Zero Liquid Discharge (ZLD) and adhere to the Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996, amended in 2023. Looking ahead, the selection of park locations — likely in Gujarat, Maharashtra, and Tamil Nadu/Andhra Pradesh based on existing clusters — will test Centre-State coordination. The scheme's success hinges on timely land acquisition (under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013), environmental clearances, and attracting global anchor tenants. If implemented effectively, BHAVYA-Rasayan could transform India into a global chemical manufacturing hub, complementing the 'China Plus One' strategy of multinational corporations and advancing the vision of 'Atmanirbhar Bharat' in a sector critical to food security, health security, and industrial sovereignty.