Union Budget 2026–27 Push for Chemical Parks

• 07 Feb 2026

Source: PIB 

Why in News? 

The Union Budget 2026–27 announced India’s first dedicated budgetary support for chemical park infrastructure, proposing a ₹600 crore, challenge-based scheme to help States establish three Chemical Parks.

What are Chemical Parks? 

• About: Chemical Parks are planned industrial clusters designed specifically for chemical and petrochemical manufacturing, where multiple units operate together using shared infrastructure and common facilities. 
• Key Features: The parks will follow a cluster-based, plug-and-play model, offering ready industrial land, common utilities, logistics support, and standard environmental compliance facilities such as waste treatment and safety systems. 
  • The initiative builds on successful cluster models such as Plastic Parks, Bulk Drug Parks, and Petroleum, Chemicals and Petrochemical Investment Regions(PCPIRs), which have demonstrated the benefits of shared infrastructure, economies of scale, and faster project execution 
• Objective: The initiative aims to strengthen domestic chemical manufacturing, reduce import dependence, improve supply-chain integration, and enhance India’s global competitiveness in bulk and specialty chemicals. 
• India’s Status: India’s chemical industry is a core pillar of manufacturing, supplying key inputs to agriculture, pharmaceuticals, textiles, automobiles and construction, contributing about 7% to GDP, ranking sixth globally and third in Asia. 
• Significance: Backed by targeted policy support and measures to encourage technology adoption, innovation, and sustainability, this integrated approach is expected to deepen domestic manufacturing capabilities and enhance India’s integration into global chemical value chains in the coming decade. 

Related Cluster-based Initiatives  

• Plastic Parks Scheme: Plastic Parks are dedicated industrial zones for plastic processing, created to promote recycling, value addition, exports, and employment through shared infrastructure and common facilities. 
• Scheme for Promotion of Bulk Drug Parks: Bulk Drug Parks aim to strengthen domestic pharmaceutical manufacturing by providing common infrastructure such as effluent treatment plants, testing laboratories, and shared utilities, thereby reducing import dependence on APIs, with parks located in Gujarat, Himachal Pradesh, and Andhra Pradesh. 
• Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs): PCPIRs are large, integrated industrial regions that support petroleum, chemical, and petrochemical manufacturing by co-locating production units with logistics, utilities, and environmental infrastructure, with major examples at Dahej (Gujarat), Visakhapatnam (Andhra Pradesh), and Paradeep (Odisha). 

Frequently Asked Questions (FAQs) 

1. What are Chemical Parks? 
Chemical Parks are planned industrial clusters with shared infrastructure and plug-and-play facilities for chemical and petrochemical manufacturing. 

2. How many Chemical Parks were announced in Union Budget 2026–27? 
The Budget announced support for three Chemical Parks, to be set up by States through a challenge-based selection process. 

3. What is the budgetary allocation for Chemical Parks? 
An allocation of ₹600 crore has been made in Union Budget FY 2026–27 for establishing these parks. 

4. Why are Chemical Parks important for India? 
They help strengthen domestic manufacturing, reduce import dependence, improve environmental compliance, and enhance global competitiveness of the chemical sector. 

UPSC Civil Services Examination, Previous Year Questions (PYQs)  

Prelims 

Q. In the ‘Index of Eight Core Industries’, which one of the following is given the highest weight? (2015)

(a) Coal production  

(b) Electricity generation  

(c) Fertilizer production  

(d) Steel production  

Ans: (b)