Introduction 

Plastic and allied products industries are the manufacturing sectors that produce various types of plastic products, such as packaging, pipes, films, sheets, bottles, containers, toys, furniture, and household items. They also include the industries that produce raw materials, intermediates, and additives for plastic production, such as resins, monomers, polymers, plasticizers, stabilizers, and fillers. Plastic and allied products industries are important for the economy, as they provide employment, contribute to exports, and support various downstream sectors, such as agriculture, food processing, healthcare, construction, and electronics. They also play a vital role in enhancing the quality of life, convenience, and safety of the consumers. In this guide, we will discuss the market potential, the government subsidies and incentives, and the marketing and sales strategies for the plastic and allied products industries in India, with a special focus on Andhra Pradesh and Telangana. 

Market Potential 

The global market for plastic and allied products is expected to grow at a compound annual growth rate (CAGR) of 4.5% from 2020 to 2027, reaching USD 754.3 billion by 2027, according to a report by Grand View Research. The major drivers for the market growth are the increasing demand for plastic products in various end-use industries, the rising population and urbanization, the development of new technologies and innovations, and the growing awareness about environmental sustainability and recycling. The major challenges for the market are the volatility in the raw material prices, the stringent regulations on the use and disposal of plastic products, and the competition from alternative materials. The global market is segmented by product type, application, and region. The product types include polyethylene, polypropylene, polyvinyl chloride, polystyrene, polyethylene terephthalate, and others. The applications include packaging, construction, automotive, electrical and electronics, consumer goods, and others. The regions include North America, Europe, Asia Pacific, Latin America, and Middle East and Africa. The Asia Pacific region is the largest and fastest growing market, accounting for more than 40% of the global market share, followed by Europe and North America. 

The Indian market for plastic and allied products is one of the fastest growing in the world, with a CAGR of 10.5% from 2019 to 2025, reaching USD 173.6 billion by 2025, according to a report by Mordor Intelligence. The Indian market is driven by the low per capita consumption of plastic products, which offers a huge potential for growth, the expansion of the domestic manufacturing sector, the favorable government policies and initiatives, and the increasing exports of plastic products to various countries. The Indian market is also characterized by the dominance of the small and medium enterprises (SMEs), which account for about 80% of the total plastic production, and the regional concentration of the plastic clusters, which are mainly located in Gujarat, Maharashtra, Tamil Nadu, Uttar Pradesh, and Karnataka. The Indian market is segmented by product type, application, and region. The product types include polyethylene, polypropylene, polyvinyl chloride, polystyrene, polyethylene terephthalate, and others. The applications include packaging, construction, automotive, electrical and electronics, consumer goods, and others. The regions include North, South, East, and West. The South region is the largest and fastest growing market, accounting for more than 30% of the Indian market share, followed by the West and North regions. 

The market potential in Andhra Pradesh and Telangana is also significant, as these two states account for about 10% of the total plastic production in India, according to the All India Plastics Manufacturers’ Association (AIPMA). The growing demand for plastic products in these states is due to the development of various sectors, such as agriculture, irrigation, infrastructure, healthcare, and consumer goods. The market size and growth projections for these states are not readily available, but they are expected to be higher than the national average, given their strategic location, availability of raw materials, skilled labor, and infrastructure. These states also have a strong presence of the plastic processing units, which produce a wide range of plastic products, such as pipes, films, sheets, molded articles, and woven sacks. The market in these states is segmented by product type, application, and region. The product types include polyethylene, polypropylene, polyvinyl chloride, polystyrene, polyethylene terephthalate, and others. The applications include packaging, construction, automotive, electrical and electronics, consumer goods, and others. The regions include Coastal Andhra, Rayalaseema, and Telangana. The Coastal Andhra region is the largest and fastest growing market, accounting for more than 50% of the market share in these states, followed by the Telangana and Rayalaseema regions. 

Government Subsidies and Incentives 

The Government of India provides various subsidies and incentives to the plastic and allied products industries, under the schemes of the Ministry of Chemicals and Fertilizers, the Ministry of Micro, Small and Medium Enterprises (MSME), and the Ministry of Commerce and Industry. Some of the major schemes are: 

• The Plastic Park Scheme, which aims to establish plastic parks with state-of-the-art infrastructure and common facilities, such as testing, training, research and development, and recycling. The central government provides a grant of up to 50% of the project cost, subject to a ceiling of INR 400 million per park. The scheme also facilitates the cluster development approach, which enhances the competitiveness, productivity, and innovation of the plastic units. The scheme is implemented in collaboration with the state governments, which provide the land and other support for the park development. So far, six plastic parks have been approved under the scheme, in Madhya Pradesh, Assam, Tamil Nadu, Odisha, Jharkhand, and Uttarakhand. 
• The Modified Industrial Infrastructure Upgradation Scheme (MIIUS), which aims to upgrade the existing industrial clusters and estates with modern infrastructure and facilities, such as roads, power, water, drainage, and waste management. The central government provides a grant of up to 75% of the project cost, subject to a ceiling of INR 500 million per cluster. The scheme also encourages the public-private partnership (PPP) model, which mobilizes the resources and expertise of the private sector. The scheme is implemented through special purpose vehicles (SPVs), which are formed by the cluster associations, the state governments, and the private partners. So far, 30 clusters have been approved under the scheme, in various states, including Andhra Pradesh and Telangana. 
• The Credit Linked Capital Subsidy Scheme (CLCSS), which aims to facilitate the technology upgradation of the MSME units in the plastic and allied products industries. The scheme provides a subsidy of 15% of the investment in eligible plant and machinery, subject to a maximum of INR 1.5 million per unit. The scheme also covers the cost of installation, erection, transportation, and electrification of the plant and machinery. The scheme is implemented through the nodal banks and agencies, which sanction the term loans and the subsidy to the eligible units. The scheme covers various technologies, such as injection molding, blow molding, extrusion, thermoforming, and recycling. 
• The Market Development Assistance Scheme (MDA), which aims to promote the exports of plastic products by providing financial assistance for participation in international trade fairs, exhibitions, buyer-seller meets, and market research. The scheme provides a reimbursement of up to 75% of the airfare and space rent, subject to a maximum of INR 150,000 per event. The scheme also provides assistance for the creation of export promotion materials, such as websites, brochures, and catalogs. The scheme is implemented through the Plastic Export Promotion Council (PLEXCONCIL), which is the apex body for the plastic exports in India. The scheme covers various plastic products, such as films, sheets, pipes, fittings, molded articles, and woven sacks. 

Government of Andhra Pradesh and the Government of Telangana

The Government of Andhra Pradesh and the Government of Telangana also provide various subsidies and incentives to the plastic and allied products industries, under their respective industrial policies and schemes. Some of the common incentives are: 

• Exemption or reimbursement of stamp duty and registration fee on land and building transactions, ranging from 50% to 100%, depending on the location and category of the unit. The units located in the backward areas, the scheduled areas, and the industrial parks are eligible for 100% exemption or reimbursement, while the units located in the other areas are eligible for 50% exemption or reimbursement. The units belonging to the women entrepreneurs, the SC/ST entrepreneurs, and the physically challenged entrepreneurs are also eligible for 100% exemption or reimbursement, irrespective of the location. 
• Exemption or reimbursement of electricity duty for a period of 5 to 10 years, ranging from 50% to 100%, depending on the location and category of the unit. The units located in the backward areas, the scheduled areas, and the industrial parks are eligible for 100% exemption or reimbursement, while the units located in the other areas are eligible for 50% exemption or reimbursement. The units belonging to the women entrepreneurs, the SC/ST entrepreneurs, and the physically challenged entrepreneurs are also eligible for 100% exemption or reimbursement, irrespective of the location. 
• Reimbursement of value added tax (VAT) or goods and services tax (GST) for a period of 5 to 10 years, ranging from 50% to 100%, depending on the location and category of the unit. The units located in the backward areas, the scheduled areas, and the industrial parks are eligible for 100% reimbursement, while the units located in the other areas are eligible for 50% reimbursement. The units belonging to the women entrepreneurs, the SC/ST entrepreneurs, and the physically challenged entrepreneurs are also eligible for 100% reimbursement, irrespective of the location. 
• Reimbursement of interest on term loans for a period of 3 to 7 years, ranging from 3% to 9%, depending on the location and category of the unit. The units located in the backward areas, the scheduled areas, and the industrial parks are eligible for 9% reimbursement, while the units located in the other areas are eligible for 3% reimbursement. The units belonging to the women entrepreneurs, the SC/ST entrepreneurs, and the physically challenged entrepreneurs are also eligible for 9% reimbursement, irrespective of the location. 
• Reimbursement of power cost for a period of 3 to 5 years, ranging from INR 0.5 to INR 1.5 per unit, depending on the location and category of the unit. The units located in the backward areas, the scheduled areas, and the industrial parks are eligible for INR 1.5 per unit, while the units located in the other areas are eligible for INR 0.5 per unit. The units belonging to the women entrepreneurs, the SC/ST entrepreneurs, and the physically challenged entrepreneurs are also eligible for INR 1.5 per unit, irrespective of the location. 
• Reimbursement of patent filing and quality certification costs, up to a maximum of INR 0.2 million and INR 0.5 million, respectively, per unit. The units that file for patents, trademarks, designs, and geographical indications, and the units that obtain quality certifications, such as ISO, BIS, CE, and ISI, are eligible for the reimbursement. 
• Subsidy for setting up effluent treatment plants and waste management systems, ranging from 25% to 50%, subject to a maximum of INR 1 million per unit. The units that install effluent treatment plants, solid waste management systems, and hazardous waste management systems, as per the norms and standards of the Pollution Control Board, are eligible for the subsidy. 
• Subsidy for setting up captive power plants and renewable energy sources, ranging from 20% to 50%, subject to a maximum of INR 10 million per unit. The units that set up captive power plants, using coal, gas, or biomass, and the units that set up renewable energy sources, such as solar, wind, or biogas, are eligible for the subsidy. 
• Subsidy for skill development and training of workers, ranging from 50% to 100%, subject to a maximum of INR 0.1 million per unit. The units that provide skill development and training to their workers, through recognized institutions or agencies, are eligible for the subsidy. 
• Special incentives for women entrepreneurs, SC/ST entrepreneurs, and backward area units, such as additional subsidy, reservation of land, and preference in allotment of government orders. The units that are owned or managed by women entrepreneurs, SC/ST entrepreneurs, or physically challenged entrepreneurs, and the units that are located in the backward areas or the scheduled areas, are eligible for the special incentives. 

Marketing and Sales 

The marketing and sales strategy for the plastic and allied products industries depends on the type, quality, and price of the products, the target market segments, the customer preferences and needs, the competitive scenario, and the distribution channels. Some of the general guidelines for marketing and sales are: 

• Identify the niche markets and segments that have a high demand and low competition for the plastic products, such as agriculture, irrigation, healthcare, and consumer goods. Conduct a market research and analysis to understand the customer requirements, expectations, and feedback, and to identify the gaps and opportunities in the market. Use the SWOT analysis (strengths, weaknesses, opportunities, and threats) and the PESTEL analysis (political, economic, social, technological, environmental, and legal) tools to evaluate the internal and external factors affecting the market. 
• Focus on the quality, durability, and functionality of the plastic products, and highlight the benefits and advantages over the substitutes, such as metal, wood, and paper. Ensure that the products meet the standards and specifications of the customers, and comply with the quality and safety norms and regulations of the government and the industry. Use the quality management tools, such as the Six Sigma, the Total Quality Management (TQM), and the Kaizen, to improve the quality and efficiency of the products and processes. 
• Adopt innovative and eco-friendly technologies and practices, such as biodegradable plastics, recycled plastics, and waste management, and showcase the environmental and social responsibility of the business. Communicate the value proposition and the unique selling proposition (USP) of the products, and differentiate them from the competitors. Use the innovation management tools, such as the brainstorming, the TRIZ, and the Design Thinking, to generate and implement new ideas and solutions. 
• Use online and offline platforms to promote the brand awareness and visibility of the plastic products, such as websites, social media, blogs, newsletters, brochures, catalogs, and advertisements. Create a strong and consistent brand identity and image, and use catchy and memorable slogans, logos, and taglines. Use the marketing mix tools, such as the 4Ps (product, price, place, and promotion), the 7Ps (adding people, process, and physical evidence), and the 4Cs (customer, cost, convenience, and communication), to design and execute the marketing strategy. 
• Participate in trade fairs, exhibitions, buyer-seller meets, and networking events to showcase the products, generate leads, and establish contacts with potential customers, distributors, and suppliers. Build and maintain long-term and trust-based relationships with the stakeholders, and seek referrals and testimonials from the existing customers. Use the customer relationship management (CRM) tools, such as the Salesforce, the Zoho, and the HubSpot, to manage and optimize the customer interactions and transactions. 
• Offer competitive and flexible pricing, discounts, and incentives to attract and retain customers, and to increase the sales volume and revenue. Adopt a pricing strategy that reflects the value and quality of the products, and covers the cost and profit margins of the business. Consider the pricing factors, such as the demand and supply, the customer willingness to pay, the competitor pricing, and the market conditions. Use the pricing methods, such as the cost-plus, the value-based, the penetration, and the skimming, to determine the optimal price level. 
• Provide after-sales service, warranty, and customer support to ensure customer satisfaction and loyalty, and to generate repeat orders and referrals. Address the customer queries, complaints, and feedback promptly and effectively, and provide solutions and remedies. Enhance the customer experience and engagement, and encourage customer participation and feedback. Use the customer satisfaction tools, such as the Net Promoter Score (NPS), the Customer Satisfaction Score (CSAT), and the Customer Effort Score (CES), to measure and improve the customer satisfaction level. 

The following table shows the approximate investment required for different production scales of plastic and allied products industries, based on the data from the MSME Development Institute, Hyderabad. The table assumes a land area of 1000 square meters, a building area of 600 square meters, and a plant and machinery cost of INR 10,000 per kg per hour of production capacity. The table also includes the working capital, utilities, and miscellaneous expenses, but excludes the interest, depreciation, and taxes.