Indian plastic exporters are aggressively looking to grab China’s share in the global market as developed countries have started scouting for alternative supply sources, in their bid to exit China. Many of these nations are holding Beijing responsible for unabated spread of the pandemic.
India’s share in the $1 trillion global plastic exports market is about one per cent, while China’s is as much as 10 per cent. Since Beijing banned the import of plastic scrap, a raw material which works out much cheaper than polymer, about two years ago, China’s cost of production went up.
Consequently, its global market share declined by one per cent during the past two years. To make matters worse for the country, the Covid-19 pandemic is prompting many nations to exit China and explore India as a possible alternative.
“We are looking to increase our global market share from 1 per cent to possibly 2 per cent in the next five years. With our best quality of products, we are confident of grabbing Chinese market share in the global plastic industry,” said Sribash Dasmohapatra, Executive Director, Plastics Export Promotion Council (Plexconcil).
India’s plastic exports declined by 9 per cent to $10 billion for the financial year 2019-20 as compared to $10.98 billion in the previous year.
Dasmohapatra said that many Japanese, American and European investors in China have announced exit from China since Covid-19 pandemic first came into light in November 2019 in Chinese city of Wuhan.
The Indian government is weighing all possible options to attract these investments into the country.
Indian plastic exporters have received an upsurge in orders from the United States, Japan and European countries since the Covid-19 pandemic spread over four months ago. But, their execution has become a big problem due to closure of manufacturing plants, transportation and shipping to overseas following nationwide lockdown which started from March 25 for three weeks initially and extended for 19 days and further by 14 days.
As the government kick starts plans to commence economic activities post the nearly 40-days nationwide lockdown, the plastics industry awaits the second stimulus package for boosting largely MSME manufacturing as well as the export segment.
“Within the plastics export segment, global buyers have been looking favorably towards India as its sourcing hub, especially in the wake of rising hesitation in doing business with China. If due support is provided by the government to the plastics industry, which largely consists of MSMEs and employs a large workforce of five million people across the value chain, reboot of business will become a reality and growth can certainly be achieved,” Ravish Kamath, Chairman, Plexconcil.
Many overseas importers have started cancelling their orders due to Indian exporters’ failure to meet export obligation following of closure of manufacturing plants, transportation and shipment to overseas.
“Plastic exporters have lost orders worth crores of rupees despite having large inventories, capacities and capabilities to capture a greater part of the global market share. International buyers do not want to wait for long for Indian exporters to execute their orders,” said Arvind Goenka, Managing Director, Wonderfloor Vinyl Floorings, a polymer manufacturer.
Plastic exporters, therefore, have urged the government to allow commencement of plants, avail working capital loan at low interest rates, allocate technology upgradation funds (TUFs) and grant export incentives to boost shipment.