An insatiable manufacturing industry, a surging economy, and supportive government policies have already made India a polymers superpower, but the best is yet to come, states a new report by business analysts GlobalData.
According to the report, India is currently the world’s third largest consumer of polymers, behind China and the United States, with a share of 5.7 percent of the 2011 global total – an increase from its 2000 portion size of 3.5 percent.
Growth in the polymers industry really kicked off in India after the country’s economic liberalization in 1991. The resulting deregulation and privatization sparked a boom in end-use sectors such as packaging, construction and automotive that has seen per capita consumption increase from 1kg in 1980 to 7.4kg in 2010.
This level, however, is still much lower than the world average and with surging industrialization and an increasingly powerful economy, the subcontinent still has massive as-yet largely untapped potential.
Production levels are soaring in order to keep up with India’s ravenous demand. In 2011, the manufacture of polymer products was 7.377 Million Metric ton per annum, and this will surge at a CAGR of 9.4 percent to reach 11.575 MMtpa by just 2016.
GlobalData’s research indicates that polymer demand in India is even outstripping the country’s strong GDP growth; in the period 2000 to 2011, India’s GDP climbed at a Compound Annual Growth Rate of 7.6 percent, whereas polymer consumption across all areas grew at a CAGR of 9.1 percent.
India’s government has played a key role in boosting the significance of polymers, in terms of both consumer demand and in the production industry. The government has delineated Petroleum, Chemicals and Petrochemicals Investment Regions where production facilities can blossom. Four of these PCPIRs have been approved so far and two more are in the pipeline.
The government also approved 100 percent Foreign Direct Investment, which allows foreign firms to have 100 percent ownership of food processing companies, which will in turn create a higher demand for plastic packaging materials.