Plastic industry using multi-pronged strategy targeting $25 billion exports: Plexconcil

Plastics products’ exports from the country are likely to top $25 billion by 2030 with Plexconcil — the Plastics Export Promotion Council under the aegis of the Department of Commerce, Government of India — working out multiple strategies to promote the products. 

“We are sure that we will be able to reach around $25 billion exports by 2030. We are using a multi-pronged strategy to promote exports. Besides these existing markets, we are exploring Latin American countries, CIS and Africa,” said Sribash Dasmohapatra, Executive Director of Plexconcil, set up in 1955.

The US, Europe and the UAE are the top three buyers of India plastic products. But Plexconcil, seeing the potential of Latin America, CIS and Africa, is arranging a buyer-seller meeting and a reverse buyer-seller meeting. 

Scope in erstwhile Soviet

“In the 2023 Plexconcil event, PlexConnect 2023, we had an export-focused event for plastics. It was successful as over 350 buyers from 50 countries took part and $16.3 million orders have materialised,” he said. 

PlexConnect 2024, scheduled to be held in June, will see over 1,000 buyers from 100+ countries taking part in product specific and general product exhibitions such as homeware, engineering plastics, and fibre-reinforced plastics (FRP).

Recently, a Plexconcil team visited Guatemala, Costa Rica and Mexico, where a buyer-seller meeting was held. Next fiscal, Plexconcil delegates will visit Kenya, Nigeria, Madagascar and other nearby African nations. 

Dasmohapatra said the CIS is an important market and Plexconcil is trying to make inroads into the erstwhile Soviet region. “For the first time, we are taking a delegation in January-end to Russia to explore the market there, which imports $14 billion worth plastics. Our presence is miniscule and even if that region is in a turmoil, we see scope there,” he said. 

Major player in economy

On the other hand, the current turmoil in the Middle-East and the Red Sea region is a cause for concern as freight costs have gone up by over three times, he said. “The delivery time is also taking three times more,” the Plexconcil Executive Director said. 

Value-added plastic products make up nearly two-thirds of overall exports in the sector. Besides, polymer which is used for manufacturing plastics is also exported. 

“Raw materials, FIBC (flexible intermediate bulk container) and plastic films are the top three categories. Then, we export all consumer and household products. Then, there is FRP, plastic pipes and hoses,” he said. 

The Indian plastic industry is a major contributor to the country’s economy. It manufactures goods worth ₹ 3,50,000 crore annually and provides jobs for about four lakh people.

Looking forward to FTAs

 “It’s a huge domestic market. We have more than 50,000 processors in the country and we use more than 1.5 lakh processing machineries. There is a huge scope for plastics exports to grow,” Dasmohapatra told businessline in an online interaction. 

Free trade agreements (FTAs) signed by the Centre with other countries are helping in a great way. However, the plastics industry is looking forward to free trade agreements (FTAs) with the European Union and United Kingdom.

This is to help the industry, in which medium and small enterprises make up over 80 per cent, compete in these markets on a strong footing after the withdrawal of the Generalised System of Preferences (GSP), which was withdrawn in 2023. Since these countries view India as a developed economy, they have ended extending GSP.

“The US has also withdrawn GSP saying we are a developed economy. Our Government has raised the issue but there has been no headway in this,” the Plexconcil Executive Director said. 

Valuation norms

The industry’s exports have been impacted due to this and with the profit margin shrinking anywhere, any headway the Centre makes will help, he said. 

Last fiscal, exports were about $12 billion. India’s exports over the last 5-10 years have grown rapidly and the first fiscal post-Covid exports were to the tune of $13.5 billion, he said, adding that products were being exported to over 200 countries.

The Plexconcil Executive Director said some FTAs have caused concern, especially with the ASEAN nations. “There are valuation norms of 40 per cent and the industry is facing problems due to this. There is no reciprocity in these FTAs,” he said.

For example, Vietnam has no competition in plastics. Therefore, many people have taken advantage and set up units there. “But we are not getting this type of reciprocity,” Dasmohapatra said. 

He said the per capita consumption of plastic in India is less compared to the US, Italy and China. “Our per capita consumption of plastics is only 16 kg against 100 kg in the US and 40 kg in Italy and other places,” he said.

Seeking TUF

Since the industry lacks enough skilled manpower, Plexconcil has urged some of the universities to launch a course in plastics engineering. “We have also requested the Centre to help more universities launch the course,” he said.  

Stating that single use plastic is creating problems for the sector, Dasmohapatra said: “Some are already thinking about biodegradable and compostable plastics. This will really help us going forward.”   

Plexconcil has urged the government to support the industry with a technological upgrade fund (TUF) as most of the machinery has to come from Italy or Germany or the US or China. “We have also asked the Centre to announced a productivity-linked incentive scheme for the plastics industry but with a lower threshold limit as most of the companies are medium and small ones,” he said.

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