Report moots national policy, fiscal support to boost bioplastics sector
A national policy is needed to establish India as a leading manufacturing destination for bioplastics, says a report by EY–ASSOCHAM.
Titled ‘Incentivising Bioplastics, a Biopolymer: A move towards a circular and sustainable economy’, the report outlines measures to make the industry sustainable through government interventions, regulatory changes, educational campaigns, and leveraging agricultural strengths.
Bio-based plastics are polymers derived from renewable biomass sources such as sugarcane, starch, plant oils and cellulose. Bioplastics offer an alternative to conventional plastic material.
National policy
A national bioplastics policy is crucial to enhance domestic capabilities in the production, application, and recycling of bioplastics. It may include provisions for composting and waste segregation at the municipal level. By fostering a clear and supportive regulatory environment, the policy could stimulate innovation and investment, positioning India more competitively in the international market, the report recommends.
By 2040, India should target replacing 50 per cent of single-use plastics with compostable alternatives to reduce the environmental footprint, it said.
Fiscal support
To drive the growth of the bioplastics sector, the report calls for capital subsidies of up to 50 per cent on eligible investments over five years. It also recommends incentives to encourage the phased adoption of bioplastics and rationalising GST rates on these materials to 12 per cent. This is expected to help offset initial costs and promote wider adoption.
The report suggests that State governments may introduce a sector-specific scheme offering fiscal benefits, including a 50 per cent capital subsidy, 7 per cent interest subvention for seven years, SGST reimbursement of investment for 14 years, power rebates, and land subsidies. This scheme may allow integration with existing policies or customised policies for large investments.
Regulatory framework
Suggesting a regulatory framework to boost the use of bioplastics, the report said a phased approach, similar to the elimination of single-use plastics, may be adopted, with bioplastics included in India’s Plastic Pact. Sector-specific restrictions on single-use plastics may be imposed, with mandatory usage of bioplastics as a replacement. Special regulatory committees may be established to monitor the bioplastics industry, and the Plastic Waste Management Rules, 2023, may be amended to cover bioplastics. Protections for the domestic bioplastics industry could include issuing quality control orders for bioplastic standards, setting import quotas, and imposing higher customs duties, it said.
Awareness
Calling for raising public awareness on the benefits of bioplastics and proper waste disposal, the report suggests launching educational campaigns and allocating funds under the Swachh Bharat Mission to promote bioplastics and composting initiatives. Such efforts are expected to enhance public understanding and drive community engagement. By leveraging its biomass potential and agricultural strengths, India can enhance its Environmental Performance Index and achieve its long-term sustainability goals, it said.
Deepak Sood, Secretary General of ASSOCHAM, said the government must take firm action to promote bioplastics. Government-backed fiscal incentives and regulatory policies are paramount in overcoming market entry challenges such as high production costs, he said.
Bipin Sapra, Tax Partner, EY India, said the 2022 ban on identified single-use plastics needs to be implemented in full to step up the demand for sustainable alternatives such as bioplastics. By allowing grants, subsidies and apt regulatory framework, the government can incentivise businesses to invest in bioplastic production, research and development. These incentives will not only bolster the economic viability of bioplastics but also foster innovation, paving the way for superior and more cost-effective bioplastic product, Sapra said.