Is plastic really a villain? The question encompasses various aspects and perspectives, each specific to the regulations and experiences of the individual or the organization. Currently, the plastic industry stands at a juncture where there is a need to focus on sustainability as well as economic viability. While the industry and a few of the players have been taking necessary measures to initiate this change, a concerted effort is lacking in decision-making talks.

Globally, the industry is portrayed in a negative light with conversations just around its mismanagement. But the flip side to this is often not discussed. A world without plastic today is realistically impossible in the near future. Owing to its cost-effective, durable, and versatile properties and advantages over materials like metal and glass, plastic production has witnessed a surge starting 1945. This widespread adoption has made plastic deeply integrated into our modern infrastructure and supply chains. Amidst this anticipating the industry to solely resolve this decade-long issue is far more challenging than it may seem. Why? The problem-solving process does not just require intervention at the organizational level but also at the end consumer, i.e., the grassroots level as well.

The path towards attaining this sustainable goal requires a comprehensive approach that addresses multiple aspects of the plastic ecosystem. Plastic is integral to modern consumerism, particularly in packaging, where it serves as the backbone of product protection and preservation. Importantly, this doesn’t have to negatively impact the environment. The key lies in transitioning usage patterns from single-use to reusable plastic products, supported by proper infrastructure and incentives.

While companies and consumers keep working to bridge the demand-supply gap, to achieve this transition, we need fiscal, policy, and tax measures that effectively regulate the entire plastic value chain, with particular emphasis on disposal and reuse systems. Despite these necessary changes, plastic remains cost-effective for consumers due to its intrinsic material properties and efficient production processes. 

The industry has the potential to increase India’s export value and get a global position, yet still remains largely untapped. The extension of Special Economic Zone (SEZ) tax incentives for the industry would help bridge this gap and increase Forex earnings.

Further, the industry, although emerging, has still not been considered for the PLI scheme. Support around these for the packaging and the recycling sector will have a multi-fold effect with encouragement for investments in strengthening infrastructure and technological aspects. The scheme, if seen in a broader context, holds potential to create a cycle of reinvestments and advancements in sustainable packaging solutions. This, coupled with corporate tax rationalisation from the current 25% to 15% for existing (old) manufacturing units, can enhance the entire gameplay. Operational costs saved here could be better utilised in R&D that would be more focussed on sustainable packaging tech and recycling infrastructure. On similar lines, an increase in the RoDTEP rates for the industry will result in Indian exports becoming more competitive in international markets—a two-way benefit—for the manufacturers and to the exchequer. Also, an extension in interest subsidy on exports with a 3% lower rate would serve as a much-needed financial cushion to companies operating in the sector with the potential to take Indian products global.

While all of this happens, in parallel there’s also a pending wish for the government to extend subsidies for the recycling sector—the need of the hour. For India’s recycling infrastructure to grow and make sustainable packaging more accessible, a 20% capital subsidy in establishing recycling infrastructure is crucial. Also, there is a dire need to provide incentives to the industry to put more recycling capacity, which will in return promote sustainability and accelerate the development of a circular economy. 

With the implementation of the above support and policy interventions, this union budget holds a crucial role in ensuring that the packaging industry grows not just in the domestic market but globally. The focus here henceforth should be on acceleration and support in creating an infrastructure ecosystem that would propel responsible use and recycling of plastics.