Polymer prices surged by around 70% in March alone, impacting over 8,000 MSMEs and more than 2 lakh workers.

Micro, small and medium enterprises (MSMEs) in Tamil Nadu and Pondicherry’s plastic manufacturing sector are witnessing a near 50 per cent cut in production as prices of key raw materials soar and shortages persist amid the ongoing US-Iran war.

In the month of March alone, the prices of polymers (which are largely derived from crude oil and natural gas) have risen by around 70 per cent, and this has disrupted operations and killed demand for over 8000 MSMEs across TN and Pondicherry, G. Sankaran, President Tamil Nadu, Pondy Plastic Association (TANPPA), told businessline. Over 2 lakh people are directly employed in these MSMEs, he added, noting that creation of “artificial scarcity” and hoarding by the polymer manufacturers were leading to this situation.

Reliance Industries is the dominant polymer manufacturer in India. Other major suppliers are Indian Oil Corporation Ltd (IOCL), GAIL, Haldia Petrochemicals, and HPCL and others, he said.

Earlier in March, Arvind M Mehta, Chairman of the All India Plastics Manufacturers Association, also said at an event that the industry has an inventory of 15-20 days, and the rise in costs is being passed on to end consumers through marginal price hikes, but if the war is prolonged, this may be a real challenge.

Industry seeks government support measures

Making a set of demands to the Central Government to help tackle this situation, the TANPPA requested that major plastic raw material manufacturing companies supply raw materials directly to plastic product manufacturers through their authorised stockists located in key cities, rather than selling in bulk to traders and intermediaries. “To prevent artificial scarcity and price manipulation, direct supply to manufacturers is essential,” it said.

The Government should also introduce a price control mechanism for plastic raw materials similar to that in force for petrol and diesel, the association said. Further, priority should be given to small and micro manufacturing units that purchase less than 20 tons per month; their list of demands adds.

In another key request, the industry body asked that the 18 per cent GST imposed on waste plastic and recycled plastic products be fully exempted. “This will result in plastic products becoming more affordable for the common public, and pollution will be significantly reduced,” they said.

Published on April 4, 2026