Economy

Encouraging technology upgrade, a must for future of plastics exports: report

LN Revathy Coimbatore | Updated on October 08, 2019 Published on October 08, 2019

The sector has been largely ignored by policy makers, says Drip Capital

While the use of plastic has risen over the years, ‘perennial’ plastic exports has been declining due to trade tension and rising environmental concerns. The key to the future of Indian plastic exports are policy interventions and market/product diversification. The sector has been largely ignored by policy makers, reads a Drip Capital report.

The US-based trade finance company — Drip Capital, in association with the Plastic Export Promotion Council of India (PLEXCONCIL) released its ‘Plastics Commodity Report’ recently. The report, while hailing India’s position as the 17th largest exporter of plastics, notes that the country’s plastics exports had risen at a CAGR of 11-12 per cent in the last three years and is estimated to reach $25 billion in trade by 2025. In FY19 exports were $8 billion.

MSMEs account for almost 65 per cent of these exports with Gujarat and Maharashtra in the lead followed closely by Madhya Pradesh, West Bengal and the Union Territories of Daman & Diu and Dadra & Nagar Haveli. It is shipped chiefly to the US and China. The West Asia and Europe have also been importing Indian plastics and plastic products, but these markets have shown a decline in recent years. Removal of the Generalised System of Preferences by the US and concerns about environmental impact of plastics have contributed to the decline.

Sribash Dasmohapatra, Executive Director, PLEXCONCIL, has said that the investment in state-of-the-art machinery has helped the sector reduce labour cost by 70-80 per cent. Government subsidy for such technology upgrade would, however, be extremely helpful, he added.

Pushkar Mukewar, Co-founder and Co-CEO, Drip Capital, pointed out that many countries have banned plastic goods completely, necessitating a shift away into other possibilities such as recyclable and biodegradable plastics.

Published on October 08, 2019
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