FTAs and trade policies bring opportunities for Indian plastic industry

India’s plastics industry is at a crucial turning point. With domestic demand rising, global supply chains shifting, and trade policy gaining significance, the sector is entering an era of opportunities. The recent India–EFTA agreement, coupled with India’s growing network of Free Trade Agreements (FTAs) and evolving trade reforms, is opening new pathways for manufacturers, exporters, and allied businesses.

For an industry that has traditionally focused on domestic consumption, these developments present the chance to expand exports, attract global investment, and move up the value chain.

According to plastics export data for the year 2024-25, India’s plastics exports have grown by 8.2% and are expected to grow to USD 14.0-billion at a rate of 12% in 2025-26. The government has set a target to achieve USD 25-billion in plastics exports by 2030.

On the domestic front, India’s plastics processing market is valued at approximately USD 44-billion, driven by rising demand in packaging, automotive, and consumer goods. The scale and momentum of this industry make it a natural beneficiary of India’s proactive trade diplomacy.

The Trade and Economic Partnership Agreement (TEPA) signed between India and the European Free Trade Association (EFTA) – comprising Switzerland, Norway, Iceland, and Liechtenstein – exemplifies this new phase of opportunity. The deal is among India’s most forward-looking FTAs, with EFTA nations committing to invest around USD 100-billion in India over the next 15 years. Beyond the investment inflow, the agreement unlocks significant tariff advantages.

EFTA countries have agreed to eliminate tariffs on over 92% of their tariff lines, covering nearly all of India’s exports. India, in turn, has offered concessions on a large portion of its tariff lines, covering over 95% of EFTA’s exports.

For the plastics and allied sectors, this is particularly impactful as tariffs on almost 95% of India’s exports in these categories are being reduced or eliminated, where previous duties reached as high as 54%. This preferential access could elevate India’s plastics exports to EFTA markets by nearly 40% in the coming years.

1. Access to high-value global markets
EFTA nations represent some of the world’s most affluent economies, with strong demand for high-performance plastic components, specialty films, and advanced packaging solutions. With tariff barriers coming down, Indian manufacturers can transition from low-margin, commodity-grade plastics to premium, technology-driven segments. This enhances price realisation and incentivises investments in quality improvement and compliance with international standards.

2. Strengthened manufacturing competitiveness
The reconfiguration of global supply chains away from China has opened new opportunities for India. With improved market access and major investment commitments under TEPA, Indian plastics producers can manufacture for export markets at more competitive rates. The combination of domestic growth and export expansion provides a dual-engine for the industry’s long-term acceleration.

3. Boost to innovation and advanced materials
As tariff walls fall, the competitive landscape broadens. This will compel Indian plastics manufacturers to enhance R&D capabilities and invest in innovation. With dedicated investment desks and simplified facilitation mechanisms under TEPA, joint ventures with European firms can bring in advanced technologies, materials, and sustainability expertise. This opens up avenues in high-end polymers, composites, specialty packaging materials, and even biodegradable plastics.

4. Push toward sustainable and circular manufacturing
Global buyers, particularly in Europe, are prioritising sustainability and circular economy principles. This global trend aligns with India’s evolving plastics policy framework, which emphasises recycling, waste reduction, and responsible manufacturing.

With FTAs facilitating access to advanced recycling technologies and capital equipment, Indian manufacturers can integrate sustainability at scale—creating export-ready, eco-conscious products that meet global expectations.

5. Integration across the value chain
India has long depended on imported feedstock, polymers, and additives. FTAs and liberalised trade regimes make it easier for domestic manufacturers to access high-quality inputs and advanced machinery, while simultaneously enabling greater export of finished goods. This dual advantage enhances efficiency, reduces costs, and strengthens India’s overall competitiveness in the global plastics supply chain.

6. Development of regional export hubs
As part of India’s broader industrial strategy, regions like Gujarat, Maharashtra, and Tamil Nadu are emerging as specialised hubs for plastics production and exports. The confluence of FTAs, infrastructure investments, and state-level incentives is fostering export-oriented clusters equipped with world-class logistics and connectivity. These hubs can serve as platforms for integrating global value chains and attracting foreign partnerships.

Thus, to make the most of emerging trade opportunities, India’s plastics industry must boost its export readiness by aligning with global standards, adopting advanced manufacturing, strengthening quality assurance, and building strong global brands. Collaboration with international partners will be vital for knowledge sharing and market access.

India’s expanding FTAs and trade policies are doing more than cutting tariffs; they're transforming the nation’s manufacturing landscape. For the plastics sector, this marks a shift from domestic focus to global competitiveness. With lower duties, greater investments, and access to premium markets, India’s plastics industry is set to emerge as an innovative and sustainable global player.