The All-India Plastics Manufacturers’ Association (AIPMA), one of the largest industry bodies representing plastics processors, has urged the Union government to extend stronger policy support to the plastics and recycling industry. In its latest submission ahead of the national budget, AIPMA has sought inclusion of plastics under the Production Linked Incentive (PLI) scheme as well as GST relief for recycling initiatives.
According to AIPMA officials, India’s plastics sector employs more than 50 lakh people directly and indirectly, spanning packaging, consumer goods, automotive, infrastructure, and medical supplies. Despite its scale, the industry continues to face challenges due to rising raw material costs, fragmented recycling infrastructure, and increasing compliance burdens around waste management.
The association has demanded that GST be reduced to nil on plastic waste and recycling machinery, making it easier for MSMEs to invest in circular economy solutions. It also proposed lowering GST from 18% to 5% on recycled plastic granules, to encourage usage of recycled material by processors. Furthermore, subsidies for the purchase of capital equipment for recycling units have been suggested to accelerate the adoption of modern technologies.
Industry stakeholders argue that such measures would align with the government’s own push for sustainability and its emphasis on Extended Producer Responsibility (EPR). With brands and packaging companies under pressure to meet recycling targets, a supportive fiscal framework for recyclers could strengthen compliance and create new business opportunities.
The proposal for PLI benefits is particularly significant. AIPMA notes that sectors like electronics, pharma, and textiles have flourished under PLI support, and plastics—with its deep integration into the manufacturing ecosystem—deserves similar recognition. By incentivising capacity expansion, technology upgrades, and exports, a PLI scheme for plastics could potentially transform India into a global hub for polymer-based manufacturing.
Industry analysts point out that such incentives would not only support domestic players but also attract foreign investment in advanced plastics and recycling technologies. As global demand shifts towards sustainable packaging and innovative polymer solutions, India could capture a greater share of the export market.
However, the proposal may face scrutiny from policymakers given the ongoing debates around single-use plastics and environmental concerns. While the government has tightened regulations on certain plastic categories, industry players insist that broad-based policy support can co-exist with sustainable practices if focused on recycling, biodegradable materials, and compliance-driven manufacturing.
For businesses across the plastics supply chain—from raw material suppliers and processors to recycling firms—AIPMA’s proposals, if accepted, could reshape cost structures and open up new avenues for growth. The coming budget session will determine whether India’s plastics industry receives the much-needed push to scale sustainably.