The Indian sub-continent has established itself as the most exciting and dynamic emerging market in the world and is one full of potential and investment opportunities.  With a population greater than China but with a polymer demand less than 20%, the region is expected to enjoy the fastest growth in polymer demand anywhere in the world over the next five years; outstripping China and other emerging economies. According to a recently published study by Applied Market Information Ltd (AMI Consulting), there is now massive investment occurring in the region’s petrochemical, polymer production and downstream plastic processing industries, driving strong growth in polymer demand. AMI forecasts that at the region’s current rate of growth its thermoplastics market will surpass 20 mln tons by 2020. The market in the region is dominated by India on account of its huge population and high GDP. However, growth in the region on the whole is driven by its increasingly globally-minded governments that are introducing policies to encourage foreign direct investment and facilitate closer integration with the worldwide economy, helping to drive investment in petrochemicals, polymer production and downstream plastic processing. Growth in the region is not only fuelled by such policy relaxations but also by rising urbanisation of a large, youthful, population, leading to greater consumer spending for items that require plastics - from packaged goods to mobile phones and automobiles. While much of these products are still imported, there is now considerable investment taking place in plastics processing operations to support manufacturing investments, driving growth in polymer demand.

Although rapidly developing, the region does face substantial challenges. For example, lack of sufficient local polymer production is a major obstacle faced by many plastics processors in the region with each country besides India being heavily or even entirely reliant on resin imports depending on the country in question; these imports are mainly sourced from India, the Middle East and South East Asia. Exchange rate fluctuations of local currencies against the dollar add further uncertainty to the market, making it harder to compete against cheaper Chinese imports of finished goods. In general, power supply in the sub-continent is tight but also erratic and unreliable in many regions, which can dramatically reduce effective utilisation. However, in India in particular, the government is seeking to address these issues by implementing strategies to tackle infrastructural and power limitations. In addition, in September 2014, it announced its “Make in India” initiative, designed to catalyse Indian manufacturing to make the country a globally recognised manufacturing hub for years to come. It is clear that plastics will be called on to play a vital role in this changing region and the plastics industry will benefit from national efforts to encourage and improve manufacturing. In its report, AMI forecasts 8% per year average increases in the Indian sub-continent over the next five years, with levels of annual growth varying from 5% in Sri Lanka to up to over 8% in India. Polymer demand in the India sub continent is currently as follows: PP at 30% of the total polymer demand, PVC at 21%, HDPE at 18%, LLDPE at 12%, LDPE at 4%, Engineering Plastics at 4%, EPS at 1%, GPPS and HIPS combined at 2%, PET at 8%.

India stands third in polymer consumption globally after China and US. Per capita consumption of plastic in India was low at 9.7 kg in 2012-13 as per Gobal Market Research.  Despite the slowdown in the economy uptil 2014, the polymer industry in India is believed to be finally on track. With an increase in demand the polymer consumption is expected to double by 2020, to about 20 million metric tons. The key players of the market believe that the growth drivers of the sector are finally in place and with the insatiable manufacturing industry, supportive government policies and a freshly surging economy, the best is yet to come for this niche. As the third largest consumer of polymers, India ranks only after China and USA, with about 5.7% of the total market share, as of 2011. Evaluation of the polymer industry trends reveals strong growth prospects citing the increased usage of plastics across sectors. The sector is projected to grow at the rate of 5.4% in 2014 and 6.5% in 2015 citing the growing demand from various industries. Furthermore, with the key market players integrating more back-end exploration and refining businesses, alongside streamlining their sourcing operations, opportunities are expected to increase in the coming years.
As polymers rapidly replace the traditional materials for packaging, other key long-term factors fuelling the growth of the sector include the recent surge in the annual car production that is predicted to grow to 9.3 mln vehicles by 2020 will further aid its growth, given that the automobile sector is one of the biggest users of polymer. Given the rising demand, the Indian government is also planning to increase its spend to about USD 1 trillion on the infrastructure requirements of the industry. Alongside, the market for electronic goods to grow by 700%, substantially triggered by the increased rural disposable income. This will inevitably cause the manufacturing sector to grow manifold, further boosting the domestic polymer industry. With the increased demand for polymer across the country India is expected to become the seventh largest consumer of polymer by 2025. Inspite of all these latent opportunities, China still produces three to twenty times more of most polymers, as compared to India, even with the population of both the countries being relatively equal. However, market experts predict that it will be the growing demand for plastics, rising costs and economic challenges that will see the Indian market growing faster than its competitors.