Such a ban would would hit growth in a number of industries, including FMCG, food processing, packaging and allied industries, the Federation of Indian Chambers of Commerce and Industry (Ficci) predicted in a report.
Bottom of pyramid hit hardest
A ban could also affect consumers in terms of cost, health and safety and have a disproportionate impact on low-priced products of Rs5 and below as the cost to manufacture and distribute these products could rise sharply, the report said.
“Further this study reveals the impact on plastics industry sales and employment. Agriculture sector and farmers could also be impacted." Dr A.Didar Singh, secretary general of Ficci
With plastics the material of choice across a number of packaging categories globally, the overwhelming majority of FMCG products in India are packaged in plastic.
A ban on plastic packaging would directly impact plastic industry sales of Rs53,000 crores (US$8.3bn), while around 1.3m staff across around 10,000 mainly SME plastic firms would need to find alternative employment, Ficci found.
Assessment: Unsound all round
“The indirect impact based on multiplier effect will be ever larger: around two to 2.5 times the direct impact on sales and around three to five times the employment levels,” it said.
Moreover, the plan is destined to backfire, said Ficci, as alternatives, “in general have lower product to package ratio, resulting in the use of higher quantities of raw materials. They also require higher energy and water during manufacturing.”
Instead, the chambers recommended finding ways to manage waste plastic better, especially with India’s low PET plastic reuse rate that is hovering around 70%. This low figure comes despite the existence of alternatives that have been shown to work in India, such as polymer blending in bitumen roads.
The government and the plastics industry should also undertake to improve the segregation, collection, recycling and re-use of plastic waste.