"We estimate that by 2020, India has the potential to grow the specialty chemicals industry from USD 22 billion to between USD 80-100 billion," McKinsey & Company said in its report, 'Building a global scale specialty chemical industry in India'.

Specialty chemicals are products with specific end uses, tailored to their application like dyes, pigments, pesticides, fertilisers, colourings, etc.

According to McKinsey, global chemicals industry -- the largest manufacturing industry in the world -- registered sales worth USD 2.5 trillion in 2010 of which specialty chemicals comprised 20 per cent.

About one-third of the global specialty chemicals business could move to Asia by 2020, it added.

"By 2020, approximately USD 350 billion of the projected USD 1 trillion global specialty chemical industry could move to Asia (excluding Japan), driven by downstream demand and competitive manufacturing costs," the firm noted.

For the success of the industry in India, McKinsey has suggested that the sector needs to develop local products at the right price, use merger & acquisitions and partnerships to grow, build a strong value proposition to attract talent, among other factors.

The global consulting agency has also suggested point for the government of India to help in facilitating success of the specialty chemicals industry.

These include encouraging specialty chemicals companies to set up plants in Petroleum, Chemicals and Petrochemicals Investment regions (PCPIRs), upgrade chemical industries to address likely talent shortfall and upgrade industrial training institutes.

Government should also establish a specialty chemicals forum to define relevant consumption standards and drive innovation and establish a database of chemical inventory of the country chemicals sector among other suggestions, McKinsey added.