GSP withdrawal: Plastic exporters explore new markets to keep ball rolling

Eye huge markets in CIS nations, Africa and Latin America, where Indian exports have a negligible presence

Fearing a decline in exports due to the withdrawal of the generalized system of preferences (GSP) by the United States in June this year, Indian plastic exporters are exploring new markets including CIS nations, Africa and Latin America to promote sales there.

The perennial markets, including the United States and China, are facing their own issues. Apart from the ongoing trade war between them, the US’ withdrawal of GSP benefit to India and the ongoing economic slowdown in China are expected to slow India’s plastic exports to these countries, which cumulatively contribute nearly 30-35 per cent of India’s overall plastic shipments.

Unfortunately, destinations like CIS countries, Africa and Latin America consume huge quantity of plastics in which India's share is negligible. Interestingly, Indian plastic exporters have doubled the allocation on marketing and promotion to these countries to Rs 18 crore for the financial year (FY) 2019-20 from as about Rs 9 crore in FY 2018-19.

“The withdrawal of GSP benefits would negatively impact our exports to the United States. We have requested the Ministry of Commerce and Industry to engage in discussions with the US to continue GSP and or incentivise exporters through some other measure as they may deem appropriate. Meanwhile, we are exploring new markets like CIS countries, Africa and Latin American, where plastic consumption is very high, bit where we have a low presence for which we have doubled our marketing spend for the current year,” said Sribash Dasmohapatra, Executive Director, The Plastics Export Promotion Council (Plexconcil).

Source: Ministry of Commerce

To achieve the goal of more than doubling India’s plastic exports to $25 billion by 2025 from $11 billion currently, the Centre has assured the industry that it will work with it and find solutions to every problem that it faces.

India imports around one million tonnes of plastic scrap largely from European Countries, of which around 40 per cent is used for making export-grade plastics.

“The plastic scrap imported from developed countries is safe and non-hazardous, as every gram is processed to manufacture usable goods. Secondly, the articles made from scrap are cheaper by up to 67 per cent than the ones produced through primary means. Thus, the import of scrap should be encouraged to make cheap products available for Indian consumers and also export articles at competitive price,” said Chintan Jain, Head of Plastic Committee of Material Recycling Association of India (MRAI) and Director, Luckystar International, one of India’s largest importer of plastic scrap.

Amar Singh, Secretary, in a representation to the Ministry of Commerce, has highlighted that prohibition on import of solid plastic waste should be lifted immediately.

The government contributes nearly 70 per cent of the fund spend on promotional activities for plastics exports. Meela Jayadev, President, The All India Plastics Manufactures Association (AIPMA) urged the government to remove anti-dumping duty on machines not made in India even as plastic finished goods should be kept in the exclusion list of Regional Comprehensive Economic Partnership (RCEP). Additionally, plastic manufacturers called for 25 per cent of land available at all industrial corridors should be allocated for micro, small and medium enterprises (MSMEs).