Chennai: Notwithstanding the current growth trajectory, plastic exports are likely to see muted growth going ahead due to plastic import ban by different countries, US-China trade war and lingering working capital concerns. Diversifying into eco-friendly varieties and alternative product categories has become imperative for the plastic industry, finds a study.
The Y-o-Y growth in plastics exports is expected to remain tepid at best, finds a report by Drip Capital. The US-China trade war and the US’s removal of Generalised System of Preferences are creating uncertainty for the future of plastic exports.
Consumers and markets are increasingly seeking eco friendly alternatives to single-use plastics. Many countries such as France, China and Malaysia, have banned these plastic goods entirely, necessitating a shift towards other possibilities.
In the midst of rising political and economic tensions globally, plastics could become a flashpoint for many trade conflicts. It is imperative that exporters and other stakeholders keep an eye on upcoming embargos/ restrictions, similar to the ones in place in Southeast Asia. In the long term, the sustainability of plastic exports remains to be seen, finds Drip Capital.
Moreover, the small and medium exporters are reliant on export incentive schemes like MEIS for working capital needs. While MEIS has been replaced by RoDTEP, the rates have not been announced yet.
