The Modi government's plan to ban single-use plastic — if implemented — will affect close to 10,000 plastic manufacturing units. The proposed ban will also cast a shadow on the future of the 3-4 lakh employees working in these units, industry sources told CNBC-TV18.
Estimates suggest that there are a total of 50,000 plastic manufacturing units in India and about 90 percent of these are MSMEs. This ban on single-use plastic will impact a large number of industries including FMCG, auto, infrastructure, etc.
Around 43 percent of the plastic usage is for packaging, and mostly single-use. India's FMCG sector, which is heavily dependent on plastics, is expected to be hit the most. "The industry is anyway dealing with a consumption slowdown, and this alternate packaging may push up costs even more," said an industry official, who did not want to be quoted.
Almost every FMCG company including HUL, ITC, P&G, Nestle, Britannia will be impacted by this plastics ban, said the official, adding beverage makers like Coca-Cola, PepsiCo, Bisleri are already working on ways to use alternatives.
Plastic waste accounts for about a tenth of the country's total municipal waste and an estimated 35 percent of the total consumption of plastic, said a report by Morgan Stanley.
"About 60 percent of India's estimated 10 million tonnes of plastic waste annually is recycled – a ratio that, while low, is still in the global top quartile and close to that of Germany and ~2x that of the US. Of the total plastic waste, about two-thirds is PE grade, while a tenth is PET (as per a 2015 government study of 60 major cities)," the report added.
While there is still no clarity on which items fall under the bracket of single-use plastics, estimates indicate that they could constitute 4-7 percent of raw material used in the manufacturing process. This means that 4-7 percent of raw materials could be completely wiped out in the chain of manufacturing.
In this context, the All India Plastics Manufacturers Association, consisting of 2000 direct members and 20,000 indirect members, has suggested that there needs to be a clear scientific definition of the term 'single-use plastic'. The industry has suggested that opinions from experts, institutions, to define 'single-use plastic' in India, would help give an unbiased view on the subject.
The industry has also suggested that any new policy should take into account the lifecycle, environmental, social and economic impact of the product versus alternate product.
If the ban is implemented, policy impacted units should be given aid or special assistance from the government, the industry sources said.