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According to experts associated with the Plastics Export Promotion Council, a body under the Ministry of Commerce, increasing prices of raw materials related to plastic manufacturing, such as ethylene, propylene, PVC, etc., could pose significant challenges to the Indian economy. This could markedly shoot the prices of plastic goods considerably in the forthcoming months. This situation is certainly not promising for the plastic industry in India.

At a time when India's plastic industry is highly competitive and is eyed as a notable substitute for the Chinese plastic industry, the rising cost of raw materials is not pleasing to the Indian economy. Considering India's plastic manufacturing sector is highly reliant on imports, the rise in prices of raw materials by around 20% (as per sources) poses a significant danger to the competency of Indian plastics prices.

Plastic imports, exports, and consumption synopsis in India

Raw materials like propylene, polypropylene, and polyvinyl chloride in India are primarily sourced from UAE, Russia, Iran, and Saudi Arabia. Having rich petrochemical (oil and gas) reserves, these key raw materials' imports (crucial for manufacturing plastics) depend on these countries. 

In the fiscal year 2022-23, India's imports of various plastic raw materials were substantial, with polyvinyl chloride (PVC), linear low-density polyethylene (LLDPE), high-density polyethylene (HDPE), and polypropylene leading the list.

According to the Ministry of Commerce and Industry, there is a notable disparity between the production and consumption of plastic raw materials in India. Production figures reached 14.31 million tonnes, while consumption was significantly higher at 19.23 million tonnes, resulting in a shortfall of 4.92 million tonnes.

Despite the domestic shortfall in production, India hasn't shown any decreasing trend in its exports. In fact, the exports are slightly above the levels seen in 2023 (hence, no mitigation of exports was registered). As of February 2024, India's plastic exports were valued at $997 million, marking a 14.3% increase from the previous year.

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Although India hosts over 50,000 plastics processors, it must ramp up its production. India predominantly has small and medium enterprises catering to sectors such as packaging, automobile components, consumer durables, and healthcare products.