In a globalized economy, R&D Intensity (R&DI) of an industrial sector is a key metric for assessing its business strengths, innovation ability and capability to change as per market demands. An attempt is made in this paper to study the R&DI relationship with various attributes of industrial basic, speciality and knowledge intensive sectors of Indian chemical industry. The turnover - R&DI relationship and its influence on the ascendancy or descendency of Indian chemical companies from one turnover zone to another has been assessed. The paper further deals with the R&D investments made by the Indian chemical industry and the importantissue of Foreign Direct Investment (FDI )for its future growth in Indian chemical sector and is discussed.The Indian chemical industry is highly heterogeneous in structure catering to the diversified manufacturing bases and markets. Lack of reliable data on its overall and sectoral performances had encouraged the Indian National Academy of Engineering to undertake a major study during 2009-2011on the R&D impact on Indian chemical industry with sponsorship from the office of the Principal Scientific Adviser, Government of India. The ICC, Mumbai played a major role in consolidating the feedback of various segments of Indian chemical industry.The INAE study has placed the gross turnover of Indian chemical sector around USD 60 billion and the cumulative investments of USD 22 billion in 2008-09. More than 85% of its volume production is accounted by the basic chemical sector with fertilizers (43%) and petrochemicals (30%) providing the major contributions (Table 1). However, the share of Knowledge intensive chemical sector is 34+ of chemical industry turnover due to its low volume and high value feature. The overall contribution of speciality chemical sector to production is around 14% with nearly 50% of it is contributed by the food processing subsector.
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