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India’s burgeoning middleclass is driving the demand for plastic and plastic products and today the sector is one of the fastest growing in the Indian economy. Export Development Canada (EDC) believes this represents opportunities for Canadian machinery and equipment manufacturers whose capabilities can meet the needs of buyers in this growing market.
India has 1.2 billion people, 60 percent of whom are under the age of 40 and boasts a middle class 350 million strong. In terms of polymers, India is a small country, consuming only 4 kilograms per capita, but things are changing. Going forward, India is poised to be one of the top five polymer consumers worldwide by the end of the decade. In that period, India’s per-capita polymer consumption is expected to increase to 20 kilograms.
That type of growth would produce annual polymer consumption of 12.5 billion kgs and require 29,000 more pieces of plastics processing machinery and an overall investment of $9.5 billion.
Besides the growing demands of the middleclass, the industry is being helped along by the Indian government’s on-going promotion of the petrochemicals industry. India’s average growth rate in petrochemicals has been between 12 and 13 percent, almost double the rate of the overall economy and shows that the industry has good prospects for the future.
Local Indian powerhouses like Reliance Industries Ltd. are already making about half of all the plastic resin consumed in India. The Mumbai-based company already ranks as the world’s seventh-largest polypropylene maker.
Much of Reliance’s output is exported. The company did less than $100 million in export business as recently as 1997 but now is on track to send $4 billion of its product elsewhere. About 18 percent of that total goes to China.
In order to compete with the best in the world, India needs to acquire better technology on the processing side. From a base of 6,500 processing machines in 1979-80, the plastic processing industry has expanded four times to a size of more than 26,000 machines. In India, the healthy growth in the packaging sector will boost demand for extruded plastic products. At present extrusion process accounts for nearly 70 percent of plastics processing, while injection and blow moulding account for 20 and 5 percent respectively.
Demand for injection moulded products is expected to grow at a CAGR of 17.7 percent until FY2007. It is estimated that the number of injection machines, which stood at 20,139 in FY97, will increase to 62,800 by FY2007. The encouraging projections are partly due to increasing consumption of polypropylene by the injection sector (expected to account for over 45 percent of total plastics consumed by injection moulders in FY2007).
Export Development Canada is working with a number of Canadian businesses to identify opportunities in this market and structure financial products to assist the sale of Canadian plastics and packaging machinery to Indian buyers.
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For more information on this sector and EDC’s products, please contact Peter Nesbitt at