India’s plastics industry | market analysis
AMI has just published a new report on the plastic market in the Indian subcontinent. This exclusive article provides an overview of key trends
Deregulation opens up new opportunities in India
Since the turn of the century, the Indian polymer industry has been one of the most dynamic emerging plastics markets in the world. However, due to the market’s size, volatility and fragmented structure, it can prove diffi cult to identify clear-cut corporate opportuni- ties, and businesses frequently struggle to achieve dependable investments in the country with a clear future strategy. The key to India’s recent and future success is
deregulation. Historically, strict regulation has limited entrepreneurial scope and closed India off from the rest of the world, making business expansion problematic. Such regulation is increasingly being relaxed, or abolished, in order to encourage foreign investment and a more consolidated industry structure. It is within markets subject to deregulation where the greatest opportunities exist. This is one of the key fi ndings of the new Indian
Subcontinent Plastics Industry Report 2013 from Applied Market Information (AMI). Based on AMI’s independently researched global polymer databases, the report offers clarity on this exciting and potentially highly profi table market. The report covers the w hole of the subcontinent, which consumed 11.5 million tonnes of polymer in 2012. In this article, we will focus on India, which accounts for over 87% of the total subcontinent market.
www.injectionworld.com
Reduction of regulation It has only been in the last decade or so that Indian polymer demand has begun to fl ourish, albeit from a low base. Polymer consumption in 2013 will be over 80% larger than it was in 2007. Whilst the economy has been a signifi cant driver in such growth, polymer demand has been growing at 2% per year faster than GDP as thermoplastics increased penetration in many applications. The development of the plastics industry has been underpinned by a process of deregulation and the abolition of numerous quota and production licences and the gradual removal of most plastics products from the items reserved for Small Scale Industries (SSI), which previously limited the scope of foreign invest- ment. SSI had only served to hold back the development and growth of plastics processing and created a very fragmented and unsophisticated plastics processing industry. Its relaxation has improved both productivity and competition. The reduction in India’s import tariff on polymers to 5% in 2007 also helped to stimulate demand. So too did the build-up in capacity for key commodity polymers such as polypropylene. There are a number of other Indian
policy alterations which are likely to increase the rate of polymer growth within the economy including the relaxa-
March 2014 | INJECTION WORLD 13
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