Published on October 21, 2013
India is third largest consumer of Polymers after China and U.S as per recent Global Data figures. Market Analysts believe that India is going to become a global polymers powerhouse. Production output of this industry is raising approx 9.4% annually. India is having share of approx 5.7% of total consumption in world as of 2011 which was 3.5% in 2000. Analysts believe that such growth in this industry happens after economic liberalization in 1991. More than 60% of Polymer is consumed by packaging industries in India, rest of that is used in automotive sector, appliances, healthcare & hygiene, plastic products and also in infrastructure development. There are some reasons behind the growth of Polymer industry, such as new developments in Packaging applications, Infrastructure boom, Modernization of Agriculture Sector, India becoming the Hub for Automobile manufacturing and improved life style and disposable income as well rural penetration to drive growth of Appliances. In 1990 total polymer consumption in India was approx 1 million metric tons that has increased to 12 million metric tons till 2012. Polymer industry growth is directly connected with the growth of its associated sectors where Polymer is mainly used. Still per capita consumption of Polymer in India is low compared to the developed nations.
Government has played a good role for the growth of this industry, in terms of consumer demand as well as the production industry. Indian government has created Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs), so that production facilities can be done easily. Four PCPIRs have been approved and other two are in pipeline. The government has also permitted 100 percent FDI (Foreign Direct Investment) which allows Foreign companies to have 100 percent of food processing firms, that will create good demand for plastic packaging materials.
Recently uncertain atmosphere has affected the demand in this industry. Even after the recent price cuts by the producers there is no improvement in demand conditions for Polymers. Indian polymer producers have decreased their prices but offer prices remained high. Producers are expecting that demand will further grow this month. Appreciating Indian Rupee as well as lowering custom exchange rate for imports has created some pressure on producers to reduce the prices. A trader said that this industry is still lacking the demand but it may grow in few days. So they have adopted wait and watch mode for further trade.
