What is the Future of Plastic Industry? Market Cap Analysis, Technology Possiblities & More

The Indian plastic industry market holds a prominent position within the country’s economy. Its history can be traced back to 1957 when polystyrene production began. Since then, the industry has made remarkable progress and experienced rapid growth. It has a widespread presence across the country, with over 2,000 exporters contributing to its success. Employment in this industry exceeds 4 million, with approximately 30,000 processing units, of which 85-90% are small and medium enterprises. Read More Business News on our website.

What is the Future of Plastic Industry?

India manufactures a diverse range of plastic products including linoleum, houseware items, cordage, fishnets, floor coverings, medical supplies, packaging materials, plastic films, pipes, and raw materials, among others. The country’s major plastic exports consist of raw materials, films, sheets, woven sacks, fabrics, and tarpaulins. The Government of India has set an ambitious target to increase the plastic industry’s economic activity from the current level of Rs. 3 lakh crore (US$ 37.8 billion) to Rs. 10 lakh crore (US$ 126 billion) within the next four to five years.

Export Trends & Market Cap Analysis

From April 2022 to February 2023, India’s plastic exports reached a total of US$ 10.9 billion. During this period, there was a notable increase in the exports of writing instruments and stationery, medical items, and plastic pipes and fittings compared to the same period last year, with growth rates of 25.0%, 19.1%, and 2.8%, respectively. In February 2023, the exports of human hair and related products experienced significant growth, with a remarkable increase of 79.9%.

Looking at the cumulative exports of plastics and related materials in the 2021-22 period, they were valued at US$ 13.35 billion, indicating a substantial growth of 35.4% compared to the previous year’s exports valued at US$ 9.86 billion. Among the different categories, plastic raw materials constituted the largest share of exports, accounting for 31.7% of the total exports in 2021-22. It witnessed a growth rate of 26.55% over the previous year. Plastic films and sheets were the second-largest category, representing 15.24% of total exports and showing a growth rate of 32.62% over the previous year.

In May 2022, the value of India’s plastic and linoleum exports amounted to US$ 1.07 billion. During the same period, several other plastic product categories, including medical items, plastic films & sheets, plastic pipes & fittings, FRP & composites, packaging items, cordage fishnets & monofilaments, and miscellaneous products, also experienced significant growth. The cumulative exports for April-May 2022 showed a year-on-year (YoY) increase of 2.6% to reach US$ 2.17 billion.

Export Destinations

India’s plastic exports reach over 200 countries worldwide. The top five importers of consumer and houseware products are the USA, Germany, Japan, the UK, and France. India’s major plastic export destinations include the USA, China, UAE, Germany, Italy, the UK, Bangladesh, Nepal, Turkey, France, Vietnam, and Indonesia. In the 2021-22 period, the value of exports to the USA, the largest consumer of Indian plastic products, reached US$ 2.43 billion, showing a significant YoY increase of 63.6%. China ranks as the second-largest consumer with a total export value of US$ 883.49 million. The USA and China accounted for 18.21% and 6.62% of the total plastic exports in 2021-22, respectively.

India’s plastic exports to France in 2021-22 amounted to approximately US$ 224.9 million. To enhance exports to France and Europe, the PLEXCONCIL collaborated with the Indo-French Chamber in the first quarter of 2021-22. Recently, Mr. Piyush Goyal, the Minister for Commerce and Industry, urged the industry to adopt international standards to facilitate global expansion. India has also signed free-trade agreements with the UAE and Australia, creating new opportunities for the plastics industry.

Government Initiative For Plastic Businesses

The Union Ministry of Commerce and Industry in India has set a target to increase the country’s plastic exports to US$ 25 billion by 2025. To enhance the manufacturing output of the plastic industry, several plastic parks are being established across the country in a phased manner. Under the plastic park schemes, project costs are eligible for funding up to 50% or a maximum of Rs. 40 crore (US$ 5 million) per project.

Government initiatives such as “Digital India,” “Make in India,” and “Skill India” are expected to provide further impetus to India’s plastic industry. For example, the “Digital India” program aims to reduce reliance on imported products, thereby benefiting local plastic part manufacturers.

The government has also initiated the development of Centres of Excellence (CoEs) to enhance existing petrochemical technology and promote research in the sector within the country. This initiative will support the exploration of new applications for polymers and plastics. Additionally, 23 Central Institutes of Plastics Engineering & Technology (CIPET) have been approved to facilitate financial and technological collaborations, fostering skill development in the chemicals and petrochemicals sector.