Market Overview and Potential of Bio-based Chemicals in India

Current State and Growth

  • The Indian bio-based chemicals market is in its nascent stage but holds significant potential for growth.
  • Market size is estimated at around USD 1.5 billion in 2023, with a projected CAGR of 15-20% over the next five years, reaching USD 4-5 billion by 2028.
  • This growth is driven by several factors:
    • Rising demand for sustainable products: Consumers are increasingly seeking eco-friendly alternatives, and bio-based chemicals offer a solution.
    • Government support: The Indian government has introduced supportive policies and initiatives to promote the development and adoption of bio-based products.
    • Focus on import substitution: India aims to reduce dependence on imported chemicals by encouraging domestic production of bio-based alternatives.
    • Cost competitiveness: Advancements in technology and increasing production capacity are gradually making bio-based chemicals more cost-competitive with traditional options.

Key Players in the Bio-based Chemicals Sector (India)

CategoryExamplesRole in the SectorElaboration
Producers (Bio-based chemical manufacturers) Specialty Chemical Producers: Chemplast Sanmar, SRF Limited, Praj IndustriesFocus on higher-value bio-based chemicals like bio-plastics, bio-lubricants, and various chemical intermediates.These companies play a crucial role in developing and commercializing innovative bio-based alternatives to traditional chemicals, contributing to diversification and market expansion.
Raw Material SuppliersAgricultural Residues: Suppliers of rice straw, bagasse, corn stover, etc. Provide essential raw materials for bio-based chemical production, often sourced from agricultural activities or dedicated biomass plantations.The availability and sustainability of these raw materials are crucial factors influencing the bio-based chemicals industry’s growth.
Microbial Cultures & Enzymes: Organica Biotech, Enviro Tech ChemicalsDevelop and supply specialized microbial cultures and enzymes for bio-conversion processes.These companies play a vital role in optimizing bio-based chemical production by providing efficient and targeted biological catalysts for specific feedstock conversion processes.
Manufacturers (Biorefinery equipment) Bioreactors & Fermenters: Praj Industries, Larsen & Toubro (L&T), Godrej Process EquipmentManufacture specialized equipment like bioreactors and fermenters, crucial for bio-based chemical production processes.These companies provide the technological backbone for biorefineries, ensuring efficient and scalable production of bio-based chemicals.
Separation and Purification Systems: – (Specific company examples may vary)Offer technologies for purification and separation of bio-based chemicals post-production.These companies ensure the quality and purity of bio-based chemicals, meeting industry standards and market requirements.
Technology Solution ProvidersProcess Design & Engineering: Mecon Limited, ChemprojectsProvide expertise in designing and engineering biorefineries and bio-based chemical production plants.These consultancies play a crucial role in translating innovative bio-based chemical production processes into commercially viable and scalable operations.

Overview of Technology & Processes for Bio-based Chemicals in India

The production of bio-based chemicals in India involves a diverse range of feedstocks and conversion processes, each with advantages and limitations. Here’s an overview:


  • Sugar-based
    • Sugarcane molasses: A readily available feedstock primarily used for producing bio-based versions of everyday chemicals like bio-ethylene glycol, bio-butanol, and bio-acrylic acid.
  • Starch-based
    • Corn: Used for producing bio-based products like bio-lactic acid, a key building block for bioplastics and other applications.
  • Cellulosic
    • Agricultural residues: Rice straw, wheat straw, and corn stover are gaining traction due to their abundance and potential for sustainable utilization. They can be converted into bio-based platform chemicals like furfural and 5-hydroxymethylfurfural (HMF), which can be further processed into various bio-based products.
  • Other potential feedstocks:
    • Lignin: A component of plant cell walls, offering the potential for producing bio-aromatic chemicals currently derived from petroleum.
    • Algae: Research focuses on utilizing algae for efficient biomass production and conversion to bio-based fuels and chemicals.

Conversion Processes

  • Fermentation: Similar to the process used for bioethanol production, microorganisms like bacteria or yeast convert sugars from various feedstocks into bio-based products like bio-lactic acid and bio-butanol.
  • Chemical conversion processes
    • Hydrolysis: This process breaks down complex molecules in biomass (like cellulose) into simpler sugars using water or enzymes, making them accessible for further conversion.
    • Gasification: Biomass is converted into a synthetic gas mixture (syngas) through high-temperature processes. These syngas can be further processed into various bio-based chemicals through different technologies.
  • Direct catalytic conversion: This emerging technology involves directly converting biomass into desired bio-based chemicals using catalysts, potentially offering a more efficient and environmentally friendly approach.

Top 10 Bio-based Chemicals with Potential in India

RankBio-based ChemicalDescriptionPotential FeedstocksExample CompaniesMicrobe used(If applicable)Innovations
1Lactic AcidBiodegradable building block for bioplastics, solvents, and food additives.Starch, SugarIGL, BiofectorLactobacillus speciesExploring alternative feedstocks (e.g., cassava waste)
Utilizing immobilized cell technology for continuous fermentation
2Succinic AcidBioplastic precursor and platform chemical for resins and coatings.Sugar, Cellulosic BiomassMyri Bioscience, BiofectorEngineered strains of E. coli or Actinobacillus succinogenesDeveloping high-yielding and robust microbial strains
Exploring cost-effective cellulosic biomass pre-treatment methods
3Bio-ethanolRenewable fuel, solvent, and intermediate for other chemicals.Molasses, Sugarcane Juice, Cellulosic Biomass (potential)IGL, Shree Renuka Sugars Ltd., Deccan Bio Energy LimitedSaccharomyces cerevisiaeOptimizing fermentation conditions for increased efficiency
Utilizing advanced distillation technologies for improved ethanol purity
4Bio-ethylene glycol (Bio-MEG)Bio-based alternative to petroleum-derived MEG used in plastics, antifreeze, and other products.Bio-ethanol (intermediate)IGLNot applicable (derived from bio-ethanol)Exploring direct conversion of biomass to Bio-MEG
Developing efficient downstream processing techniques
5Bio-butanolSustainable solvent, fuel additive, and intermediate for other chemicals.Sugar, MolassesIGL, BioAchene Innovations Pvt. Ltd.Clostridium acetobutylicumUtilizing alternative feedstocks (e.g., corn)
Implementing integrated biorefinery models
6Bio-propylene glycol (Bio-PG)Biodegradable alternative to petroleum-derived PG used in cosmetics, pharmaceuticals, and antifreeze.Bio-ethanol, Sugar FermentationIGL, BiofectorEscherichia coli or Clostridium ljungdahliiEngineering high-yielding microbial strains for Bio-PG production
Exploring alternative feedstocks and pre-treatment methods
7Bio-acrylic acidRenewable building block for bioplastics, paints, and adhesives.Bio-ethanol (intermediate)IGLNot applicable (derived from bio-ethanol)Developing efficient catalysts for bio-ethanol conversion to bio-acrylic acid
Exploring direct fermentation pathways for bio-acrylic acid production
8Bio-based polyolsEco-friendly alternatives to petroleum-based polyols for polyurethane foams, resins, and coatings.Plant oils, Other Bio-based FeedstocksBLC Leather Chemicals India Pvt. Ltd. (exploring), The Phoenix Mills Ltd. (exploring)Utilizing various microorganisms (e.g., yeasts, bacteria) for different polyol types Exploring enzymatic pre-treatment of feedstocks for improved efficiency
9Bio-based surfactantsSustainable alternatives to traditional surfactants for cleaning products and cosmetics.Plant oils, SugarsEco Green India, Biosurfactants India Pvt. Ltd.Exploring non-food-based feedstocks for sustainable productionExploring non-food-based feedstocks for sustainable production
10Bio-based lubricantsEnvironmentally friendly lubricants derived from plant oils for machinery and vehicles.Plant oilsIGL, Ishan Bio-lubricants Pvt. Ltd.Not applicable (direct chemical processing)Utilizing advanced catalytic processes for efficient conversion of plant oils to lubricants
Developing bio-based additives for enhanced lubricant performance

Emerging Tech and Process Innovations in Top 10 Bio-based Chemicals in India

1. Lactic Acid

  • Consolidated bioprocessing (CBP): Combining fermentation and downstream processing into a single step, potentially improving efficiency and reducing costs.
  • Enzyme immobilization: Immobilizing enzymes on solid support allows for their reuse and continuous fermentation processes, enhancing efficiency and reducing enzyme production costs.

2. Succinic Acid

  • Metabolic engineering: Engineering microbial strains to improve succinic acid yield and production efficiency through targeted genetic modifications.
  • Consolidated bioprocessing (CBP): Similar to lactic acid, combining fermentation and downstream processing for increased efficiency and cost-effectiveness.

3. Bio-ethanol

  • Consolidated bioprocessing (CBP) with cellulosic biomass: Integrating cellulosic biomass pre-treatment, enzymatic hydrolysis, and fermentation in one step for more efficient conversion to bio-ethanol.
  • Advanced fermentation technologies: Utilizing simultaneous saccharification and fermentation (SSF) to improve conversion efficiency and reduce process time.

4. Bio-ethylene glycol (Bio-MEG)

  • Direct conversion of biomass to Bio-MEG: Exploring technologies like catalytic conversion of cellulosic biomass or syngas to Bio-MEG, bypassing the bio-ethanol intermediate stage.
  • Development of efficient biocatalysts: Engineering enzymes or whole-cell biocatalysts specifically for the direct conversion of biomass to Bio-MEG, potentially improving efficiency and sustainability.

5. Bio-butanol

  • Utilization of non-food feedstocks: Exploring alternative feedstocks like agricultural residues, instead of corn, to ensure food security and enhance sustainability.
  • Integrated biorefinery models: Combining bio-butanol production with the production of other bio-based chemicals or biofuels from the same feedstock, improving overall resource utilization and economic viability.

6. Bio-propylene glycol (Bio-PG)

  • Utilizing alternative feedstocks: Exploring feedstocks like lignocellulose or waste glycerol alongside sugar-based sources for broader feedstock flexibility and sustainability.
  • Novel fermentation pathways: Developing and engineering microbial strains for direct bio-conversion of various feedstocks into Bio-PG, potentially bypassing the bio-ethanol intermediate step.

7. Bio-acrylic acid

  • Bio-based production from succinic acid: Developing efficient catalytic conversion processes to transform bio-based succinic acid into bio-acrylic acid, creating a more sustainable production pathway.
  • Direct fermentation pathways: Researching and developing microbial strains with the capability to directly convert bio-based feedstocks into bio-acrylic acid, eliminating the need for intermediate chemical conversions.

8. Bio-based polyols

  • Utilizing diverse microbial strains: Exploring and optimizing different microbial strains for the production of various types of bio-based polyols with desired properties.
  • Enzymatic pre-treatment of feedstocks: Utilizing enzymes to break down complex feedstocks into simpler components, improving the efficiency of subsequent conversion processes for bio-based polyol production.

9. Bio-based surfactants

  • Production from renewable oils: Utilizing plant oils or other renewable feedstocks as raw materials for bio-based surfactant production, enhancing sustainability and reducing dependence on petroleum-derived alternatives.
  • Microbial production using genetically modified organisms (GMOs): Engineering microorganisms to produce specific types of bio-surfactants with desired properties and functionalities for various applications.

10. Bio-based lubricants

  • Advanced catalytic processes: Utilizing advanced catalysts for the efficient conversion of plant oils into high-performance bio-based lubricants with desired viscosity, thermal stability, and other lubricating properties.
  • Development of bio-based additives: Formulating bio-based additives to enhance the performance characteristics of bio-based lubricants, such as improving anti-wear properties and oxidation stability.

Bio-based Chemicals in India: Development Stage

TRL LevelDevelopment StageDescriptionExamples
TRL 8-9Mature TechnologiesThe research focused on potential feedstocks and promising conversion pathways.Lactic acid production from sugarcane, bio-based ethanol production
TRL 7Advanced DemonstrationDemonstrated in pilot or semi-commercial operations, nearing market entry or broader adoption.Succinic acid production from biomass, levulinic acid production
TRL 5-6Validation StageProcesses and technologies validated in relevant environments, progressing towards demonstration and commercialization.Furfural production from agricultural residues, bio-based polymers (e.g., PHA, PLA depending on stage)
TRL 3-4Early DevelopmentPotential demonstrated in laboratory settings, requiring further refinement.Production of bio-based aromatics, advanced biopolymers, platform chemicals from algae
TRL 1-2Fundamental ResearchProduction of bio-based aromatics, advanced biopolymers, and platform chemicals from algaeNovel biocatalysts for chemical synthesis, direct conversion of lignocellulosic materials into high-value chemicals

End-Use Applications of Bio-based Chemicals in India

IndustryExamples of Bio-based ChemicalsApplications
Personal Care & CosmeticsBio-surfactantsShampoos, soaps, detergents
Bio-emollients & moisturizersSkincare products
Bio-based fragrancesPerfumes and cosmetics
TextilesBiodyesSustainable textile coloration
Bio-based finishesStain resistance, wrinkle resistance, softness in fabrics
Bio-based fibersAlternative to conventional fibers like cotton
Construction & Building MaterialsBio-based adhesives & sealantsEco-friendly alternatives to conventional adhesives
Bio-based resins & coatingsPaints, coatings, and varnishes
Bio-based insulation materialsEco-friendly building insulation
PackagingBioplastics (PLA, PHA)Biodegradable and compostable packaging materials
Bio-based coatings & filmsProtective and functional coatings for food packaging
AgricultureBiofertilizersEnhance soil fertility and support plant growth
BiopesticidesSustainable pest control and disease management
Other IndustriesBio-lubricantsEco-friendly alternatives to petroleum-based lubricants
Bio-solventsCleaning and degreasing applications

Key Challenges

Despite the promising potential of bio-based chemicals in India, several challenges hinder its growth and wider adoption:

Feedstock Availability and Cost

  • Competition: Bio-based feedstocks like sugarcane molasses and corn compete with food production for land and resources, potentially driving up prices and impacting food security.
  • Logistics: Efficient collection, transportation, and storage infrastructure for diverse feedstocks, particularly cellulosic biomass, require development and investment.
  • Sustainability: Ensuring sustainable sourcing and utilization of feedstocks throughout the life cycle is crucial to minimize environmental impact.

Technology and Innovation

  • Cost-competitiveness: Bio-based production processes often face higher costs compared to established petrochemical-based alternatives. Technological advancements and scale-up are needed to improve efficiency and cost-effectiveness.
  • Feedstock diversity: Developing efficient and cost-effective processes for utilizing diverse bio-based feedstocks beyond traditional sugar-based sources is essential.
  • Downstream processing: Efficient and cost-effective purification techniques are crucial for obtaining high-purity bio-based chemicals required for various applications.

Policy and Regulatory Environment

  • Supportive policies: Consistent and well-defined government policies are needed to incentivize investments in bio-based technologies and infrastructure development.
  • Standards and regulations: Establishing clear standards and regulations for bio-based products to ensure quality, safety, and environmental sustainability is crucial.
  • Intellectual property: Encouraging and protecting intellectual property rights is essential for promoting innovation and attracting investment in the sector.

Market Adoption and Consumer Awareness

  • Consumer awareness: Raising consumer awareness about the benefits of bio-based products and promoting their sustainability credentials is crucial for driving market demand.
  • Price competitiveness: Bio-based products often face higher price points compared to conventional alternatives. Addressing cost competitiveness and bridging the price gap is essential for wider adoption.
  • Infrastructure development: Expanding the availability of bio-based products through distribution channels and infrastructure is necessary to reach consumers and compete effectively.

Additional Challenges

  • Skilled workforce: Building a skilled workforce with expertise in bio-based technologies and processes is essential for long-term success in this sector.
  • Waste management: Developing efficient and sustainable waste management solutions throughout the bio-based production chain is crucial.

Key Stakeholders in India’s Bio-based Chemicals Ecosystem

Government Agencies

  • Department of Biotechnology (DBT): Provides funding and support for research and development in bio-based technologies.
  • Ministry of New and Renewable Energy (MNRE): Promotes the development and deployment of renewable energy sources, including bio-based fuels and chemicals.
  • Council of Scientific and Industrial Research (CSIR): Network of research institutions researching bio-based technologies.
  • Indian Institute of Technology (IITs), National Institutes of Technology (NITs): Leading technical institutions engaged in research and development activities related to bio-based chemicals.

Industry Players

  • Chemical Companies: Established chemical companies like IGL (India Glycols Limited) and Shree Renuka Sugars Ltd. are actively involved in producing bio-based chemicals.
  • Start-ups and SMEs: Several emerging companies like Biofector, Myri Bioscience, BioAchene Innovations Pvt. Ltd., and Eco Green India are focusing on developing and producing bio-based chemicals.
  • Agriculture Industry: Plays a crucial role in providing feedstocks, with sugarcane producers and potential involvement from corn growers in future developments.

Academic and Research Institutions

  • Leading universities and research institutions, such as IITs, NITs, Indian Institute of Chemical Technology (IICT), and research laboratories of private companies, conduct research and development in bio-based technologies.

Non-Governmental Organizations (NGOs)

  • Advocate for sustainable development and promote the use of bio-based alternatives to conventional chemicals.


  • Play a crucial role through their purchasing decisions and rising demand for sustainable products can drive market adoption of bio-based chemicals.

Financial Institutions

  • Banks and investment firms can play a significant role by providing funding and investing in innovative bio-based ventures.

International Collaboration

  • Collaboration with international organizations, research institutions, and established bio-based companies in other countries can foster knowledge sharing, technology transfer, and market access.

Additionally, various industry associations and platforms facilitate collaboration and knowledge sharing among stakeholders in the bio-based chemicals ecosystem.

Value Chain Analysis: Bio-Based Chemicals Sector 

StageKey PlayersActivitiesOpportunitiesBottlenecks
Feedstock SourcingFarmers, agricultural cooperatives, forestry companies, waste management companiesCultivation/collection of biomass feedstocks (sugarcane, corn stover, rice straw, bagasse, etc.) Establishing sustainable biomass plantations or sourcing from dedicated partnerships.
Exploring untapped waste streams (municipal solid waste, industrial organic waste).
Ensuring sustainable and reliable feedstock supply throughout the year.
Managing logistics and transportation costs effectively.
Pre-treatment & ProcessingBiorefinery operators, logistics companies, equipment manufacturersHigh R&D costs and challenges in achieving cost competitiveness compared to conventional alternatives.
Regulatory hurdles and challenges in obtaining approvals for new bio-based products.
Investing in efficient pre-treatment technologies for optimized conversion and reduced waste.
Offering pre-processing services as a standalone business model.
High capital costs associated with pre-treatment infrastructure.
Adapting processes to handle diverse feedstocks.
Bio-conversion Biorefinery operators, technology providers, engineering companiesTransforming pre-treated biomass into intermediate chemicals or biofuels through fermentation, gasification, or enzymatic hydrolysis.Developing and deploying innovative bio-conversion technologies for higher yields and efficiency.
Offering specialized bio-conversion services for specific feedstocks or products.
Technological limitations in scalability and certain conversion processes.
Dependence on robust microbial cultures and enzymes for efficient bio-conversion.
Purification & Separation Biorefinery operators, chemical processing companies, equipment manufacturers Separating and purifying desired bio-based chemicals from product mixture (distillation, extraction, chromatography). Optimizing separation processes for specific products and minimizing waste generation.
Offering contract purification services to other biorefineries.
Selecting cost-effective and efficient purification methods for specific products.
Managing disposal of residual waste streams.
Product Development & ManufacturingChemical companies, research institutions, technology providersResearch, development, and formulation of bio-based products using purified chemicals.Identifying and focusing on niche markets or applications with high demand for bio-based alternatives.
Collaborating with research institutions or universities for R&D activities.
Packaging, transportation, storage, and distribution of bio-based chemicals and products to various industries and consumers.
Marketing and promoting sustainability and performance advantages of bio-based products.
Distribution & MarketingLogistics companies, distributors, retailers, e-commerce platformsPackaging, transportation, storage, and distribution of bio-based chemicals and products to various industries and consumers.
Marketing and promoting sustainability and performance advantages of bio-based products.
Developing strong logistics and distribution networks to reach a wider market base.
Utilizing innovative marketing strategies to raise consumer awareness and educate them about bio-based products.
Reaching a wider customer base and competing with established players in the market.
Building brand recognition and consumer trust for bio-based products.

Top 10 Bio-based Chemicals in India and Promising Indian Startups/Businesses

Bio-based ChemicalExample StartupsNotes
Lactic AcidBiofector, String BioMyri Bioscience is developing large-scale production. String Bio has the potential for alternative feedstocks using gas fermentation.
Succinic AcidMyri Bioscience, String BioIGL is a major producer exploring diversification and innovation. String Bio has the potential for methane to MEG innovation.
Bio-ethanolPraj Industries, Cleantech BiofuelsPraj Industries specializes in advanced processes from various feedstocks. Cleantech Biofuels focuses on cellulosic biomass conversion.
Bio-ethylene glycol (Bio-MEG)India Glycols Limited (IGL), String BioIGL is an established producer with the potential for optimization. Biofector focuses on sustainable routes for production.
Bio-butanolBioAchene Innovations, India Glycols Limited (IGL)BioAchene Innovations focuses on non-food feedstocks. IGL is an established producer exploring optimization.
Bio-propylene glycol (Bio-PG)India Glycols Limited (IGL), BiofectorIshan Bio-lubricants offers a range of bio-based lubricants. The research focus is likely in academic/institutional labs.
Bio-acrylic acidIndia Glycols Limited (IGL)IGL is an established producer with the potential to explore bio-based routes. The research focus is likely in academic/institutional labs.
Bio-based polyolsSri Biotech Laboratories India Ltd, Niche companies (e.g., BLC Leather Chemicals)Sri Biotech explores production. Niche companies exist in specific applications like leather.
Bio-based surfactantsBiosurfactants India Pvt. Ltd., Eco Green IndiaBiosurfactants India produces various bio-surfactants. Eco Green India specializes in bio-surfactants for cleaning products.
Bio-based lubricantsIshan Bio-lubricants Pvt. Ltd.Ishan Bio-lubricants offers a range of bio-based lubricants. Research focus is likely in academic/institutional labs.

Specific Investment Landscape and Incentives for India’s Bio-based Chemicals Sector

Targeted Government Incentives

  • Production Linked Incentive (PLI) Scheme: Launched in 2021, the PLI scheme offers financial incentives for scaling up manufacturing of specific bio-based chemicals, including:
    • Bio-ethylene glycol (Bio-MEG)
    • Bio-acrylic acid
    • Bio-butanol
    • Bio-propanol
    • Lactic acid
    • Succinic acid

The scheme provides financial assistance in the form of a direct transfer of a percentage of sales value for a specified period, subject to meeting specific production and investment thresholds.

  • Scheme for Financial Support to MSMEs (Micro, Small and Medium Enterprises): This scheme provides financial assistance to MSMEs in the form of:
    • Subsidy on capital expenditure
    • Interest rate subvention on loans
    • Credit guarantee schemes

This scheme aims to encourage MSMEs to participate in the bio-based chemicals sector.

  • Tax Exemptions and Concessions
    • Bio-based chemicals may be eligible for reduced Goods and Services Tax (GST) rates compared to their conventional counterparts, making them more competitive.
    • Companies setting up bio-based chemical units in Special Economic Zones (SEZs) may benefit from:
      • Exemption from customs duty on import of capital goods and raw materials
      • Income tax benefits
      • Simplified regulatory procedures

Additional Investment Options

  • Venture Capital and Angel Investors: Several venture capital firms and angel investors are actively looking to invest in promising bio-based startups in India, focusing on areas like:
    • Novel bioconversion technologies
    • Sustainable feedstock development
    • Development of high-value bio-based chemicals
  • Public-Private Partnerships (PPPs): The government encourages collaboration between public and private entities for large-scale bio-based projects, providing opportunities for both:
    • Public sector: Accessing private sector expertise and technology
    • Private sector: Leveraging government resources and infrastructure


The bio-based chemicals market in India, though nascent, shows significant growth potential driven by increasing demand for sustainable products, government support, and technological advancements. Estimated at USD 1.5 billion in 2023, the market is projected to grow at a CAGR of 15-20%, reaching USD 4-5 billion by 2028. Key players, including producers, specialty chemical manufacturers, and technology providers, are pivotal in developing innovative bio-based alternatives to traditional chemicals, supported by diverse feedstocks like sugarcane, corn, and agricultural residues

Despite this promising outlook, challenges such as feedstock availability, technological advancements, regulatory support, and consumer awareness need addressing. Strategic initiatives and investments can help overcome these hurdles. By fostering collaboration among government agencies, industry players, academic institutions, and international partners, India can establish itself as a leader in the global bio-based chemicals market, aligning with environmental sustainability goals and promising significant economic benefits.

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