The Covid pandemic exposed the chinks in the global supply chains and the dangers of excessive reliance on China.

Now many South-East Asian countries are racing to plug that gap. India has come up with the Production Linked Incentive (PLI) scheme, where the objective of which is to make domestic manufacturing globally competitive and create Global Champions.

Laminate sector is one hidden gem where Indian players have surpassed Chinese competitors. India exports high-quality laminates to more than 100 nations and has the potential to treble that number. The size of the India decorative laminates market was $1.6 billion in 2021, according to a study from IMARC Group. IMARC Group expects the market to reach $2.3 billion by 2027, exhibiting a CAGR of 6.13 per cent during 2022-2027.

The industry, however, continues to face pressure from other countries, necessitating the need to maintain aggressive export prices and reduced margins. To grow at a faster pace, the sector needs support from the government in the form of incentive schemes backed by consultative policy building.

Extension of PLI scheme to the sector will increase India’s export share to compete with other major exporting nations like China, the US, Germany, and Japan as well as our South-East Asian counterparts like Thailand, Malaysia, Indonesia, and Vietnam.

Export potential

As the laminate sector is already one of the top exporters, the PLI scheme will be effective for mobilising investments for both brownfield and greenfield projects. The financial incentive will enable the sector to spend on cutting-edge production and marketing techniques, expanding distribution network to newer territories, paving way for consolidation of the raw material industry.

This would certainly increase the margins for the sector and the additional boost will cement this position. As the domestic real estate sector is showing signs of recovery, growth in the real estate sector would be a key factor which would drive up demand for laminates.

Over the next five years, the total investment is projected to be around ₹2,500 crore, incremental sales are projected to be around ₹5,000 crore and 30,000 new semi-skilled and skilled jobs are expected to be created. The sector predicts consistent growth in domestic sales of about 14 per cent. PLI Scheme would significantly increase the accessibility and acceptance of Indian laminates in global markets.

Mittal is MD & CEO, Greenlam Industries Ltd; Deshpande is Partner, Business Law Chamber

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