Critical Product/Equipment/Process: Chemicals, Pharma & Process

Overview

Key molecules, materials and process technologies in chemicals, pharma, diagnostics and energy - from biosimilars and battery chemistries to crude grades.

Branded formulations & biosimilars

The two segments above commodity generics. Branded formulations are domestic prescription products sold on decades-old brand and doctor relationships rather than on molecule
Biosimilars are highly similar versions of off-patent biologics - mAbs, insulins, trastuzumab - needing comparability studies rather than bioequivalence; with complex generics they are now 15-20%+ of the mix at several large players

Genomics/molecular testing

High-complexity testing that reads nucleic acid rather than measuring analytes - PCR, next-generation sequencing, oncology panels, carrier and inherited-disease screening, liquid biopsy and companion diagnostics
It sits at the top of the pathology value chain, requiring a central reference lab, bioinformatics capability and clinical genetic counselling rather than a collection-centre network

NTR films (non-tearable X-ray film)

Non-Tearable film - a coated polyester substrate for digital printing, sold as a cheaper and far more durable alternative to silver halide photographic paper
Used for photo albums, certificates, identity cards, playing and greeting cards and menu cards. It is the specialty niche the surviving Indian photographic producers pivoted into as consumer film demand disappeared

PACS (picture archiving & communication systems)

Picture Archiving and Communication System - the software layer that stores, retrieves and distributes medical images in DICOM format across a hospital or lab network, replacing physical film libraries and hand-carried jackets
It is what makes digital imaging useful rather than merely digital, and is the integration point for teleradiology, electronic records and AI reading tools

Newsprint cycle

Newsprint is roughly 35-40% of a publisher's operating cost and is largely imported, so margins swing with global pulp prices, freight and the rupee. Russia has historically supplied over half of India's imported newsprint
The cycle has been violent - costs surged nearly 41% in FY23 on Russia-Ukraine logistics disruption, eased as supply normalised, then tightened again through 2026

Russian crude discount (Urals)

Urals is Russia's medium-sour export grade, redirected to Asia after European sanctions. It traded $15-20/bbl below Brent at the peak, and Russian crude rose from under 2% of India's imports pre-2022 to roughly a third of the basket
Discounts narrowed to $3-6/bbl by 9MFY26, then widened again to $7-12 through 2026 as sanctions on Rosneft and Lukoil pushed sellers to compete for the remaining buyers

NMC vs LFP battery cathode chemistry

The two dominant lithium-ion cathode chemistries. NMC uses nickel, manganese and cobalt for high energy density and better cold performance; LFP uses iron and phosphate, sacrificing density for lower cost, longer cycle life and greater thermal stability
LFP has taken share globally as cost and safety outweighed range, and suits Indian conditions and price points particularly well

12V auxiliary battery in EVs

Even a battery-electric vehicle carries a small 12-volt battery to power lights, locks, infotainment, control electronics and the contactors that connect the high-voltage traction pack
It is typically lead-acid, though lithium variants are appearing, and is replaced on a cycle similar to a conventional starter battery

Home UPS / inverter segment

Lead-acid batteries paired with an inverter to provide household backup during grid outages, plus tubular batteries for longer discharge. It is a consumer durable business sold through electrical retail rather than an automotive one
Demand tracks grid reliability, summer peaks and rising appliance ownership rather than vehicle sales

Capacity utilisation - glass furnace campaign

A glass furnace runs continuously for a campaign of roughly 10-15 years before the refractory lining must be rebuilt. It cannot be switched off economically, so it runs at full rate regardless of demand
Rebuilding costs a large fraction of a new furnace and takes months of zero output

Value-added mix - glass (VAG)

Float glass processed further - toughened, laminated, insulated, coated or reflective - for architectural, automotive and appliance use. Processing adds function such as safety, solar control or acoustic insulation
It is the route out of commodity float pricing, where a plain sheet competes on price alone

ASU (air separation unit)

The core industrial gas asset - a cryogenic plant that compresses, cools and distils air into oxygen, nitrogen and argon. It runs continuously and cannot be cycled economically
Power is typically 60-70% of operating cost, making an ASU effectively a machine for converting electricity into gas

Merchant vs packaged gases

Beyond on-site pipeline supply, gases reach customers as liquid delivered by cryogenic tanker into a customer's storage tank, or as compressed gas in cylinders. Merchant liquid serves mid-size industrial users; packaged cylinders serve small workshops, hospitals and laboratories
Realisation per unit rises sharply from pipeline to liquid to cylinder

Specialty/electronic gases

Ultra-high-purity gases and gas mixtures for semiconductor fabrication, display manufacture, medical use and laboratories - nitrogen trifluoride, silane, high-purity argon and others, specified to parts-per-billion impurity levels
India has historically imported most of its electronic gas requirement

Ammonium nitrate

The oxidiser at the heart of commercial explosives - mixed with fuel oil it becomes ANFO, the bulk blasting agent used in mining. It is also a controlled substance under explosives regulation because of its misuse potential
India has historically imported a share of its requirement, and domestic capacity has been expanding

Bulk vs packaged explosives

Bulk explosives are pumped or augered directly into blast holes from a mobile truck at the mine site; packaged explosives come as cartridges loaded by hand. Bulk suits large opencast operations, packaged suits underground and small-scale work
Bulk delivery is increasingly sold as a blasting service rather than a product

Overburden removal (coal)

Stripping the rock and soil above a coal seam before the coal can be extracted. It consumes the bulk of explosives used in opencast mining, and volumes rise as mines deepen and the stripping ratio worsens
It is the single largest driver of industrial explosive demand in India

Spread - chlor-alkali (ECU realisation)

Electrolysing brine produces caustic soda, chlorine and hydrogen in fixed proportions that cannot be varied. ECU realisation is the combined revenue from that fixed basket per tonne, and is the industry's core pricing metric
It hit a decade low near Rs 23,000/MT in FY21 against about Rs 38,000/MT in FY19

Spread - chlorine by-product netback

Caustic soda demand generally exceeds chlorine demand, so chlorine accumulates as a surplus by-product. Producers sometimes pay customers to take it away, giving a negative netback
Chlorine cannot be stored or transported easily, so it must be consumed near the plant

Forward integration - chlorine derivatives (CPVC/ECH)

Building downstream capacity that consumes captive chlorine - chlorinated PVC for hot-water piping, epichlorohydrin for epoxy resins, and other chlorinated derivatives. It converts a surplus by-product into a specialty product
India imports much of its CPVC and epichlorohydrin requirement

Rubber vs specialty grades

Rubber-grade carbon black is the reinforcing filler in tyres and rubber goods and accounts for most volume; specialty grades go into plastics, coatings, inks, batteries and conductive applications at far higher purity and price
Specialty requires different plant configuration and customer qualification

AHF (anhydrous hydrogen fluoride, fluorine gateway)

Anhydrous hydrogen fluoride is the gateway chemical for all fluorine chemistry, made by reacting fluorspar with sulphuric acid. Every refrigerant, fluoropolymer and fluorinated intermediate begins with it
It is highly corrosive and hazardous, so handling capability is itself a barrier

PTFE & specialty fluoropolymers

Polytetrafluoroethylene and related fluoropolymers - PVDF, FKM, PFA - offer chemical inertness, heat resistance and non-stick properties no other polymer family matches. They serve chemical processing, semiconductors, wire insulation, medical devices and lithium-ion battery binders
They sit at the top of the fluorine value chain, several steps beyond refrigerants

Contract manufacturing - fluorinated molecules (CDMO)

Contract development and manufacture of fluorinated intermediates and active ingredients for pharmaceutical and agrochemical innovators. Fluorine is present in a large share of modern drug and crop-protection molecules because it improves stability and potency
The innovator owns the molecule; the Indian partner owns the fluorination capability

Battery materials (fluorine)

Fluorinated compounds essential to lithium-ion cells - lithium hexafluorophosphate electrolyte salt, PVDF binder and fluorinated additives. All derive from the same AHF base as refrigerants and fluoropolymers
India imports essentially all of its requirement

PTA/MEG/caprolactam feedstock

Purified terephthalic acid and monoethylene glycol combine to make polyester; caprolactam makes nylon. All are petrochemical derivatives, so man-made fibre cost is crude-linked rather than crop-linked
Duty exemptions have been extended to PTA and MEG to lower MMF input costs

Laminated & tempered auto glass

Windscreens are laminated - two glass layers bonded by a plastic interlayer that holds fragments together on impact; side and rear glass is tempered to shatter into blunt granules. Both are safety-mandated rather than optional
Newer vehicles add acoustic interlayers, solar control coatings and sensor and camera mounting for driver assistance

Caustic soda / soda ash

Both are alkalis but made differently and used differently. Caustic soda comes from brine electrolysis and serves alumina, textiles, paper and soaps; soda ash is made by the Solvay process or from natural trona and goes mainly into glass, detergents and now lithium carbonate processing
They are partial substitutes in some applications

Base oil (Group I/II/III)

Lubricants are base oil plus additives. Group I is solvent-refined and declining; Group II and III are hydroprocessed with higher purity, and Group III enables long-drain synthetic oils
Base oil is 70-80% of lubricant cost, is crude-linked and largely imported by India

VAM price volatility

Vinyl acetate monomer is the key input for polyvinyl acetate wood adhesives and many emulsion products. It is petrochemical-derived, largely imported, and its price swings sharply with global supply outages and crude
It is the dominant raw material cost for adhesive manufacturers

Tile adhesive & waterproofing

Construction chemicals - cement-based tile adhesives replacing traditional sand-cement mortar, plus waterproofing membranes, admixtures and repair products. They are technical products sold on performance rather than price
Global construction-chemical majors compete directly in this segment

Crude/TiO2-linked input costs

Titanium dioxide is the white pigment that provides opacity in paint, and along with solvents, resins and monomers it makes paint cost largely crude and mineral linked. Raw materials are typically 55-60% of paint revenue
TiO2 is imported and subject to trade actions

Glass & metal packaging economics

Glass containers are made on continuous furnaces with 10-15 year campaigns and very high energy intensity; cullet - recycled glass - reduces both energy use and raw material cost. Metal packaging uses tinplate and aluminium priced on global benchmarks, with BIS food-grade specifications governing use
Premium spirits and beverages are the main demand driver for glass

Gas kiln cost & Morbi cluster

Ceramic tile firing is gas-intensive, so natural gas price determines cost competitiveness. Production concentrates in the Morbi cluster in Gujarat, where a large unorganised base supplies branded players under outsourcing arrangements
Branded companies increasingly outsource manufacture and focus on design and distribution

Masterbatch & formulation IP

Masterbatch is concentrated colour or additive carried in a polymer base, dosed into a converter's material; engineered compounds and thermoplastic elastomers are formulated polymers with specified properties
Formulations are qualified into a customer's product and are hard to displace

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