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Indian plastics industry posts robust growth
Source：Plastics News Asia
Date Published：3/20/2017 01:03:14 PM
Global economic growth is generally interlinked to petrochemical consumption where plastics production is a major growth contributor. Plastic processing is the pillar of economy in most of the advanced economies.
In India alone, the plastics industry comprises of around 25,000 companies and employs 3 million people. The industry, which originated way back in 1957 with the first production of polystyrene, has shown considerable progress over the years that now India has more than 2,000 exporters. The industry employs about 4 million people and comprises more than 30,000 processing units, 85-90% of which are small and medium-sized enterprises.
Plastics processing industry has grown at an average of 10% in volume terms from 8.3 MMTPA in FY10 to 13.4 MMTPA in FY15 and is expected to grow 10.5% from FY15 to FY20 to reach 22 MMTPA. In value terms, the plastic processing industry has grown 11% from Rs 35,000 crores in FY ’05 to Rs 100,000 crores in FY15.
Domestic consumption of plastics has been on the rise and is projected to breach the 20 million MT mark by 2020. The chemicals & petrochemicals and plastics industry has grown around 12%, defying all claims of a slowdown in the economy post the demonetization drive, according to Ananth Kumar, Minister forChemicals & Fertilizers.
Statistics further show that the export of plastic products was US$ 7.64 billion in FY 2015-16. During 2015-16, major importers of Indian plastic products were US (US$ 898.45 million), China (US$ 489.25 million), UAE (US$ 422.74 million), Germany (US$ 290.03 million), UK (US$ 287.68 million), Italy (US$ 286.9 million), Turkey (US$ 285.23 million), Bangladesh (US$ 184.33 million), Saudi Arabia (US$ 169.1 million) and Nepal (US$ 161.09 million).
Packaging currently accounts for the largest consumption of plastics in India, at 24% of overall consumption. The Indian plastic industry is making significant contribution to the economic development and growth of various key sectors in the country which includes automotive, construction, electronics, healthcare, textiles, and FMCG.
Indian government support for the plastics industry
Make in India program, Skill India program, Digital India program, Swachh Bharat Abhiyan (Clean India initiatives) and Start up India initiatives by the Government of India are opening up opportunities for even more accelerated growth in the plastics industry.
As an example, in Digital India program, most gadgets are made of plastics. In the electronics industry, in the next 5 to 10 years, most of the products are proposed to be made in India. Imports from China and other countries are being reduced and India will become a major sourcing hub. Smart cities, rapid urbanization, increase in sale of packaged products through retail and e-Commerce mode, low per capita consumption, shifting consumer lifestyles, large young population, majority of population of middle income group, many manufacturing segments adopting higher percentage of plastics, etc. are contributing toward the growth of the Indian plastics industry.
The Indian plastics industry has geared itself to take up the challenges of quantitative and qualitative growth to push the country to a higher growth path. On top of that, the government has already taken various industry friendly policy initiatives such as deregulation of the petrochemical sector and allowing 100% FDI under the automatic route to facilitate fresh investments in 2015 itself.
The Department of Chemicals and Petrochemicals has approved a scheme for setting up of need based Plastic Parks to promote the domestic downstream plastic processing industry. A scheme of setting up “Centres of Excellence (CoEs)” which aims at improving the existing petrochemical technology and research environment in the country and to promote the development of new applications of polymers and plastics, has also been implemented.