Burgeoning packaging demand, favorable government initiatives to drive Indian polymers market to US$28 bln by 2020

Chemical industry is a vital component of the growing Indian Industry which includes basic chemicals and its products such as fertilizers, varnishes, paints, petrochemicals, FMCG products, pharmaceuticals and more. This industry holds a pivotal position owing to the economic development of a country and acts as a building block for various downstream industries like papers, paints, textiles, FMCG products, pharmaceuticals and many more. As per UN Comtrade Database for 2014, India ranks 13th in the world for exports of chemicals (excluding pharmaceutical products) and ranks 9th in the world imports of chemicals. As per a report by IndustryARC, burgeoning packaging demand, favorable government initiatives to drive Indian polymers market to US$28 bln by 2020 The market in 2014 was US$15 billion and is dominated by western region which is poised to exhibit the fastest growth due to favorable macroeconomic conditions like population growth and financial conditions like increasing FDI investments. Rural market is growth frontier for the polymers manufacturers in India providing a huge market to be tapped. Western India is the largest consumer of plastics accounting for almost 47% of the total consumption in India. India is the third largest consumer of polymers after China and U.S. Moreover, key market players are all set to integrate more back-end exploration and refining businesses along with streamlining their sourcing operations in order to boost the market in the coming years. Polyethylene (PE), which includes HDPE, LLDPE and LDPE accounts for the largest share i.e., 43% of total Consumption of polymers, while PP accounts for 24% of total consumption. The polyethylene market in India is anticipated to grow at a CAGR of 11.3% during the forecast period 2015 to 2020. The number of manufacturers across India for polymers has increased manifold. These manufacturers are actively investing in scaling up its position in the market and are able to attract profitable deals. Some of the major players are RIL, GAIL, HPL, IOCL and many others. Major firms spent huge amounts of money in the development of new production plants and efficient technologies and at the same time, new firms are coming up with cutting-edge technological innovations, resulting in tremendous increase in the degree of competition. The overall polymers market in India is characterized by large number of companies but top three companies account for more than 80% market share due to the wide distribution network and brand reputation. Demand for polymers is gradually picking up in India from past few years. Due to the significant drop in the crude oil prices people are buying it for inventory and production which will gradually result in some stability in polymer pricing. It is a possibility that there will be an upturn, although not a major one from 2016, and there will be an opportunity for the market to stabilize at a slightly higher level than where it is today. The demand for HDPE is estimated to grow rapidly in the coming years. It is all set to conquer the polypropylene demand in applications such as food packaging, construction and electrical. Hence, to meet the domestic demand imports of HDPE is likely to increase. The market is poised to exhibit new product launches and strategic acquisitions or partnerships, as major companies explore for new opportunities.