II.
Introduction
T
he chemical industry is critical for the economic development of any
country. Indian chemical sector accounts for 13% of the gross value
added by the industries segment. With Asia's increasing contribution
to the global chemical industry, India emerges as one of the focus
destinations for chemical companies worldwide. Chemical industry is critical
for the economic development of any country as it offers products and
solutions for virtually all sectors of economy.
The chemical industry in India accounted for USD 118 Bn in FY13 and is
expected to grow at 8% p.a. over the next 5 years. Indian petrochemical
industry which includes the end products like polymers, synthetic fibers,
surfactants, etc. has grown at 11% from USD 19.3 billion in FY11 to USD 27
billion in FY14.
Major driver for the consumption of petrochemicals are plastics. Since plastic
products permeate the entire spectrum of daily use items and cover almost
every sphere of life like clothing, housing, construction, furniture,
automobiles, household items, agriculture, horticulture, irrigation,
packaging, medical appliances, electronics and electrical etc. Current low per
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capita consumption level of plastic products in India as compared to
Knowledge Paper on 03
Plastics Industry
developed countries indicates that India offers a huge opportunity over long
term (Refer Figure 1).
Figure 1: Per capita plastic products consumption (Kg/person)
109
65
45
32
10
USA Europe China India Brazil
Source: PlastIndia, Business Press, Research by Tata Strategic
Packaging industry in India has seen a strong penetration of plastics as
compared to global standards. However, agriculture sector still hasn't
explored the benefits of plastics to a large extent. Global average for plastics
demand in agriculture is 8% while India is substantially lower at only 2%.
Figure 2: Polymer utilization by application, FY13
Substantially lower
43% consumption
in India
35%
25%
21%
17% 16% 18%
15%
8%
2%
Packaging Infrastructure Auto Others Agriculture
Global average India
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04 Knowledge Paper on
Plastics Industry
Driven by the increased focus on the Make in India campaign, Ministry of
Chemicals & Fertilizers and the Central Institute of Plastics Engineering &
Technology (CIPET) have actively extend their support for the growth of
plastic industry in India. For e.g, an export-oriented plastic cluster has been
proposed to be set up at an investment of over Rs 100 crore in Lucknow. India
Industries Association (IIA) in collaboration with CIPET will set up this cluster.
Cluster has already generated interest amongst 200 industrialists and
entrepreneurs and is expected to generate direct employment opportunity
for ~2,500 youth.
Additionally, rising thrust on 100 smart cities will further propel the growth of
plastic industry. Considering the critical elements of any smart cities such as
water management, infrastructure, waste management, etc. the usage of
plastics can bring efficiency in all such fields and can therefore, make the
smart cities more sustainable and cost effective.
New investments are expected in plastic sector with 40,800 additional plastic
processing machines are expected to be installed by FY15 and could
potentially generate 3 million additional employment opportunities.
Significant investments planned in sectors such as water & sanitation
management, irrigation, power, transport etc. will result in making India a hub
for PVC and CPVC product manufacturing.
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Knowledge Paper on 05
Plastics Industry
