The Bureau of Indian Standards, a quality monitoring body under India’s Ministry of Chemicals and Fertilizers, has introduced minimum quality standards for the manufacturing and import of polypropylene (PP), a valuable raw material used in plastic product manufacturing. PP stands as one of the most frequently utilized thermoplastics globally, serving as the basis for a diverse array of plastic packaging, lightweight machinery, and equipment components, as well as fibers and textiles.
A global notification issued on Tuesday by the World Trade Organization (WTO) on behalf of the Indian government states, “The order aims to ensure the compliance of PP with Indian Standards. Locally produced or imported goods (PP in this context) are required to adhere to Indian standards and bear the standard mark, granted under a license from the Bureau of Indian Standard (BIS), which will serve as the certifying and enforcing authority.”
Scheduled for implementation after a six-month period, starting from February 15, 2024, the BIS quality standard is anticipated to impact both PP production and imports in India. As a member of the polyolefin family, PP shares similarities with polyethylene due to their analogous monomer – propylene and ethylene, respectively. Despite these resemblances, significant differences exist in terms of density, service temperature, rigidity, resistance to environmental stress cracking, and susceptibility to oxidation.
Polypropylene boats have commendable mechanical properties, exceptional chemical, thermal, and electrical properties, as well as aesthetic appeal in applications like transparent films. Its lower cost per unit weight and greater yield on a volumetric basis due to its low density offer substantial economic advantages to converters and end-users.
Rising demand
According to industry sources, India’s demand for PP reached 6.6 million tonnes during the financial year 2023-24, marking a 6 percent rise from the 6.1 million tonnes reported in the preceding fiscal year. PP accounted for more than 37 percent of the overall polymer demand in India during the financial year 2022-23. In the January-March 2023 quarter, India’s PP demand was approximated at 1.9 million tonnes, in contrast to the 1.7 million tonnes recorded in the same period of the preceding year.
However, India’s increasing demand revealed domestic PP production to be insufficient. Consequently, the total PP imports for India were documented at 960,000 tonnes in the financial year 2022-23. As a result, PP emerged as the second most imported polymer in India, trailing only behind polyvinyl chloride (PVC), which accounted for a total import volume of 1.44 million tonnes during the financial year 2022-23.
PP consumption in India has been steadily ascending in recent years, driven by its extensive range of applications. The Indian plastic industry projects the country’s PP demand to escalate by 5.4 percent in the financial year 2023-24, following a 6 percent upsurge reported in the financial year 2022-23. PP finds extensive use across various industries, with approximately 40 percent dedicated to packaging and a cumulative 29 percent utilized in consumer and institutional applications. The transportation sector consumes roughly 10 percent, while the remaining 21 percent is allocated to miscellaneous sectors, districts from the aforementioned segments.
Capacity expansion
A recently published report reveals that Indian producers have been consistently devising strategies to expand their production capacity, aiming to cater to the escalating domestic demand and foster self-sufficiency in polypropylene. Consequently, the Indian industry could potentially witness an additional capacity of approximately 3 million tonnes per annum (MTPA) within the next three years, facilitated by Nayara Energy’s 0.5 million tonnes project, set to commence operations in 2023.
Three projects, one from each Hindustan Petroleum Corporation Ltd (HPCL), Chennai Petroleum Corporation Ltd (CPCL), and Indian Oil Corporation Ltd (IOCL), are anticipated to become operational in 2024. HPCL is slated to commence commercial production with its 1 million TPA project, while both CPCL and IOCL are projected to initiate their 475,000 TPA and 450,000 TPA of PP production, respectively, in 2024. Furthermore, IOCL and Gail India Ltd are preparing to launch commercial production for their 200,000 TPA and 500,000 TPA PP projects in 2025.
Nevertheless, these capacity expansions might prove insufficient to meet India’s mounting demand across existing and emerging applications. The projection indicates that India’s PP demand will continue its growth trajectory, thereby offering a promising prospect for global exporters. The consultancy firm TransGraph has estimated that the transportation, rubber, and plastic sectors will be pivotal in driving India’s PP demand to reach 7.84 million tonnes by the financial year 2026-27.
Experts’ comment
Deepak Balani, Director General of the All Indian Plastics Manufacturers Association (AIPMA), remarked, “India is a deficit country, compelled to resort to imports due to inadequate domestic production. The country’s production capacity falls short of its overall demand. Indian entities import specific, limited quantities of unique PP grades to fulfill highly specialized applications that are not presently manufactured domestically. Consequently, the imposition of BIS quality standards is poised to adversely impact the availability of these specific grades, as well as PP overall. The costs associated with such materials will inevitably rise.”
“In terms of quality standards, international companies have already adhered to the quality regulations of the European Union, alongside other Asian and American guidelines. Given their adherence to these standards, there appears to be no rationale for introducing an unnecessary quality standard that could obstruct the process. However, predicting the context of Indian companies’ compliance with BIS standards is challenging. Such quality norms are traditionally applied to products with surplus domestic production in order to discourage imports. Yet, India’s local PP production falls short of consumption, rendering such a quality standard unnecessary,” Balani elaborated.
An expert, speaking to Polymerupdate, conveyed that the government should not deter PP imports through superfluous quality standards. “By importing PP at competitive prices, we are able to manufacture high-quality finished products for export, positioning ourselves to compete effectively with global counterparts in foreign markets. Imposing restrictions on imports would drive up our production costs, making us less competitive internationally and thereby undermining our export potential.”
He further commented, “The government should prioritize the finished product sector, which generates maximum employment. Import of raw materials should remain obstructed. However, the government should consider regulating the import of finished products based on quality and other standards.”
