News Excerpt:

Rising prices of raw materials for manufacturing plastic products could further burden the Indian economy and lead to a hike in the prices of plastic goods, said an official of the Plastics Export Promotion Council (PLEXCONCIL).

About the news:

• Raw materials used for manufacturing plastics, such as ethylene and propylene, are primarily sourced from countries with abundant petrochemical resources, such as Russia, Iran, the United Arab Emirates, and Saudi Arabia. These countries have significant oil and gas reserves, which are the primary sources of these raw materials.
• Being import-dependent and facing a 20% rise in raw material prices, Indian products are struggling to remain globally competitive, especially at a time when India is seen as an alternative to China.
• There is a huge gap between the production and consumption of raw materials for plastics in India. According to data from the commerce ministry, in 2022-23, India produced 14.31 million tonnes (MT) of plastic raw material, while consumption stood at 19.23 million MT, a deficit of 4.92 million MT.
• Despite the insufficient production of raw materials by Indian companies to meet domestic demand, India's exports have not decreased volume-wise compared to last year. However, internationally, the price of raw materials has risen by 20% due to increased demand.
• India's plastic exports in February 2024 were worth $997 million, up 14.3% from $872 million in the corresponding month of the previous year.
• In India, several companies produce polymers used as raw materials for plastics, including some big players like Reliance Industries Ltd, ONGC Petro Additions Ltd and Indian Oil Corporation (IOC). These companies play a crucial role in producing and supplying polymers for various industries in India.
• India is also home to over 50,000 plastics processors, primarily micro, small, and medium enterprises. They serve a wide array of industries, including packaging, automobile components, consumer durables, and healthcare products.