India's plastics sector wants to be the top alternative to China

New Delhi — Plastics industry leaders in India say they see opportunities as global supply chains look for alternatives to China, but one prominent European industry leader says the country should send a signal to investors and move beyond plastic bans.

"The world is now looking beyond China post-COVID, and its shutdown created serious supply-chain challenges," said Jigesh Doshi, president of the Plastindia Foundation, an umbrella group of the country's largest plastics business associations. "Now everyone is talking about 'China-plus-one,' which offers huge opportunities for India."

But in an interview at the Plastindia 2023 show, held Feb. 1-5 in New Delhi, a prominent European plastics machinery executive said the country's bans on single-use plastics send the wrong signal.

Ulrich Reifenhäuser, managing director of German extrusion machinery firm Reifenhäuser GmbH & Co., said that while the company has a five-decade presence in India with hundreds of equipment installations, some of the government's plastics policies work against making a more direct investment.

He advocated instead for the government to give time for its new extended producer responsibility (EPR) policies to work.

"India is a growing and stable market for us all these years but banning plastic [scares] us," he said. "We can only commit ourselves to a larger presence if there is a strong commitment from the government and its policies that say plastic is good and reliable. With EPR for the plastic sector introduced in India, let it mature with government support."

While the country has adopted some single-use plastics bans, the head of the Plastindia show said they have do not seem to have hurt India's larger plastics industry, which is recording double digit annual growth.

"Single-use plastics do not impact the industry growth, as they are below 5 percent of the total production," said Ajay Shah, chairman of the Plastindia 2023 show.

In February 2022, years after conceptualizing EPR policies for plastic in 2016 through the government's Plastic Waste Management Rules, India put down more specific rules and fines for violations based on the 'polluter pays' principle.

Also at the show, other foreign exhibitors said they were interested in increasing their presence in the country.

Huntersville, N.C.-based Microban International Ltd. said a positive response from Indian customers at K 2022, the large German plastics fair, drove it to exhibit at Plastindia and strengthen its distributor network.

"We believe India is an interesting growth market apart from China in this part of the world," said Kimberley Cherrington, manager of global brand & marketing communications. "We have been present in this market from 2005 but post-COVID there is a spurt in our India business as the focus is more on hygiene."

Currently, India constitutes only 2 percent of sales but it's seeing growth in India's automotive, health care, construction and packaging sectors, with government initiatives and demand in end-user industries expected to increase it more than 10 percent in the next three to five years.

Italian compounder Radici Group said it's seeing growth after buying the engineering plastics division of India's Ester Industries Ltd. in mid-2022.

It plans to move from Ester's current site in Uttarakhand to a new location under construction in Halol after April 1, where it will have capacity of 20,000 metric tons annually.

"We have grown by 300 percent post-acquisition," said Federico Percassi, India country manager for the company. "Earlier we used to sell in-between 5,000 [metric tons] to 6000 metric tons in the Indian market, without a plant."

It's seeing growth in India's automobile sector, as well as electronic and telecommunications markets.

Meanwhile, U.S.-engineering polymers maker Ascend Performance Materials said it sees opportunities after buying an Indian plastic compounding company, Formulated Polymers Ltd., in March 2022.

"With crises in Europe and China, customers are looking at India as viable high-quality location to manufacture products," said Dharm Vahalia, South Asia managing director. "As well, an improved regulatory framework… is also impacting quality standards positively."