New Delhi [India], November 24 (ANI): India’s domestic chemical companies continue to face significant risks driven by persistent Chinese dumping and uncertainty surrounding U.S. tariff policies, according to a recent report by Systematix Research.
The report highlighted two major concerns for the industry — delays in project execution and ongoing pressure from China’s aggressive dumping practices combined with unclear U.S. trade measures. At the same time, it noted that a quicker conclusion to the agrochemical destocking cycle could serve as a major positive trigger for the sector.
“The impact of Chinese overcapacity and dumping remains the most significant and persistent headwind,” the report stated.
Chinese dumping in the Indian chemical market refers to China selling chemical products at artificially low prices, creating unfair competition and driving down domestic prices. To counter this, India has imposed anti-dumping duties on several Chinese chemical products to safeguard local manufacturers and ensure fair trade practices.
This long-standing pressure has significantly affected margins in several segments, including phenolics (ATLP), advanced intermediates (DN), packaging films, and technical textiles (SRF). According to the report, companies such as SRF Chemicals, Deepak Nitrite (DN), and Atul (ATLP) have been among the hardest hit.
Additionally, heavy destocking in the agrochemical sector has eroded the Advanced Intermediate business of Deepak Nitrite, while emerging uncertainties over U.S. tariffs have created challenges for companies like Aarto Chemicals and SRF.
The report also noted that customers are delaying procurement decisions as they wait for clarity on global pricing trends and future trade policies.
Despite these headwinds, volumes across the coverage universe remained resilient in the second quarter and the first half of FY26. This stability was achieved despite a difficult macroeconomic environment, rising geopolitical tensions, and abrupt shifts in global trade regulations.
However, aggressive pricing pressures and steep dumping from China have continued to squeeze margins across both commodity and select specialty chemical segments.
While short-term challenges persist due to trade uncertainty and project delays, the report concluded that the sector’s resilience in volumes and profitability provides some measure of relief. (ANI)
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