The COVID-19 pandemic caused businesses all over the world to take a beating, with lockdowns and supply chain disruptions throwing many industries into chaos. But one sector has shown resilience and growth in the post-COVID era: specialty chemicals and nutraceuticals. This expansion has been by a greater focus on preventive health, increased domestic demand, and supportive government policies.
The post-COVID era has also seen a boom in India’s nutraceutical industry, thanks to heightened health consciousness among consumers and a focus on preventive healthcare and immunity-building. During the pandemic, consumers across urban India increasingly turned to dietary supplements like multivitamins, immunity boosters, herbal extracts and functional foods as a first line of defence against illness and disease.
And nutraceuticals rely on specialty chemicals manufacturers for their formulations, to produce high-quality, effective vitamins and supplements. Specialty chemicals and extracts improve the therapeutic effects and bioavailability of nutrients in nutraceuticals, which is why these two sectors have seen a symbiotic growth.
Prevention first: The growth of nutraceuticals post-COVID
Nutraceuticals — a portmanteau of the words “nutrition” and “pharmaceuticals”— refer to products that offer health benefits beyond basic nutrition. This category includes dietary supplements, fortified foods, and herbal extracts designed to support overall wellness and help prevent chronic illnesses. Driven by growing health awareness and lifestyle shifts (especially post-COVID), the nutraceutical market in India is experiencing rapid and sustained growth.
A report from Grand View Research indicates that the market size for India was estimated at $30.37 billion in 2024 and is projected to grow at a CAGR of 13.6% from 2025 to 2030. There are several reasons for this growth.
- Awareness: Consumers are becoming more health-conscious, and increasingly turning to nutraceuticals as a natural way to boost immunity and manage lifestyle diseases like diabetes, obesity, and hypertension—both as prevention and support to traditional treatments.
- The “plant-based” shift :A rising preference for herbal and organic products is emerging, fueled by concerns over the side effects of synthetic medicines. Ayurveda-based nutraceuticals, in particular, are seeing increased popularity.
- Rapid urbanisation: As the Indian middle class grows and disposable incomes rise, a larger segment of the population is choosing to spend on health and wellness products.
- Government incentives: India’s regulatory framework has evolved to bolster the nutraceutical sector, with the Food Safety and Standards Authority of India (FSSAI) issuing detailed guidelines under its 2016 regulations to ensure product safety and quality. Complementing this, government initiatives like the PRISM scheme provide grants and support to startups and MSMEs, encouraging innovation and R&D in the health and wellness space.
The role and rise of specialty chemicals
India is a major chemical manufacturing hub, valued at $178 billion and ranked 6th worldwide and 4th in Asia. With over 80,000 chemical products, the specialty chemicals segment leads the sector, accounting for over half of India’s chemical exports in dollar terms. The application of specialty chemicals extends to a wide range of industries, including nutraceuticals, agrochemicals, dyes, pigments, textiles, construction, personal care and more.
The growth in specialty chemicals could be seen prior to the pandemic as well. Data from FICCI’s 2020 report, Indian Special Chemicals Industry, details some impressive numbers. India’s chemicals industry stood at $180 billion in 2019, with specialty chemicals constituting about 18% of that sector at $32 billion. This segment also grew faster than the overall chemicals industry during the 2014-2019 period, with a CAGR of 11% driven by an increase in domestic demand from end-user segments and strong export growth.
Within the space, supply to agrochemicals and dyes and pigments are the biggest piece of the pie, with close to half of the market share combined. Nutra-functional ingredients have a share of 3%. It may not seem like much, but the burgeoning nutraceutical sector has opened new avenues for smallcap specialty chemical companies in India, that supply critical ingredients like antioxidants, vitamins, and Omega-3 fatty acids and more, all of which are essential for nutraceutical formulations.
Small cap specialty chemical firms serving the nutraceuticals industry
Several small-cap specialty chemical companies have capitalised on the larger growth scenario
- Fairchem Organics Ltd: Specialises in manufacturing intermediate nutraceuticals, including natural and mixed tocopherol concentrates and sterol concentrates, used in vitamin E formulations and other dietary supplements. (Screener – net profit has declined)
- Camlin Fine Sciences Ltd: Developers of Biosus™ DHA, a vegan and sustainable form of docosahexaenoic acid (DHA), an omega-3 fatty acid essential for human health. The company offers a range of specialty chemicals that are used in food and nutraceuticals. (Screener: in losses right now)
- Anupam Rasayan India Ltd: A CSM (custom-synthesis manufacturing) firm, ARIL specialises in custom synthesis and the manufacturing of specialty chemicals and active-ingredients for various applications, including life sciences and nutraceuticals. Their two key operating segments are life-science-related specialty chemicals, and other specialty chemicals. (Screener – net profit has declined)
As consumer demand for health supplements rises, the need for high-quality, specialised chemical ingredients will increase, offering significant opportunities for small-cap companies in the speciality chemicals space.
Plus, government initiatives promoting health and wellness, along with favourable regulatory frameworks, are expected to further bolster the nutraceutical sector, indirectly benefiting small cap specialty chemical manufacturers.
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