PVC supply: Compromised supply chain could pose a colossal threat to the national economy

By Suhasini Bhattacharya

Polyvinyl Chloride (PVC) is a synthetic polymer which is extremely durable, lightweight and resistant to corrosion. It is of great economic importance because of its usage in diverse sectors. It is indispensable for several industries.

In India, PVC is extensively used in sectors such as agriculture, infrastructure and construction, healthcare, and pharmaceuticals. The agricultural sector makes up for 15% of the GDP, infrastructure and construction cover 9%, while healthcare and pharmaceuticals cover 3.2% and 2% respectively. Together these sectors constitute 29% of the country’s GDP.

Because of its heavy use in these sectors, it can be said with justification that a significant part of India’s economy relies on the steady supply of PVC.

Role of PVC in Agriculture
As we stare at rapid climate change impacting our monsoon patterns and rainfall, our agricultural production and therefore food security is getting dependent on irrigation infrastructure which underlines the criticality of PVC for our agricultural economy and food security.

Before the advent of PVC pipes, farmers used metal or clay piping for this purpose, but this often resulted in clogging, rust and other forms of degradation. Subsequently, PVC pipes were widely adopted by farmers due to its durability, resistance to corrosion, ease of installation and affordability.

The agricultural sector is significantly dependent on irrigation infrastructure which is largely made of PVC pipes. Irrigation infrastructure and allied water transportation systems drive 73% of the demand for PVC.

It is also to be noted that 60% of our nation’s population works in the agricultural sector which implies that the supply chain resilience of PVC also has a critical role in employment generation in the Indian economy.

Role of PVC in water supply
With rapid urbanisation in India, and with national projects such as Piped Water to All (Jal Jeevan Mission) and Smart City Mission, efficient piping for water has become a national priority. Jal Jeevan Mission promises safe and adequate drinking water through tap connections for all rural households.

Since, PVC pipes are resistant to corrosion and other chemical degradation and are low maintenance, they are the natural choice for piping requirements supporting the rapid urbanisation of India. PVC is also free of toxins like lead. Lead in piping for potable water contributes to lead poisoning through water.

Role of PVC in Construction
The infrastructure and construction sectors require PVC pipes for purposes such as structural applications, electrical conduits, ventilation ducts and more. They provide insulation, protection against moisture and mechanical damage.

A rising middle-income population in India, would require an increased need for housing in both urban and rural areas, driving the need for pipes, window profiles, wire and cable products and flooring, which are all largely made of PVC.

Role of PVC in Healthcare and Pharma
As per the Advanced Plastiform, the most prevalent polymer used in healthcare is PVC, making the healthcare sector highly dependent on this polymer. It is the ideal material for making medical equipment such as masks for anaesthesia and oxygen since it is malleable and has high material resilience, so it can be bent, twisted, and deformed without damage.

It holds its strength and durability under a variety of conditions so it’s incredibly reliable for medical and healthcare use.

Also while it is white and opaque in its rigid form, additives and plasticizers can transform the material to have incredible transparency and clarity. This allows healthcare workers to monitor IV bags, catheters, feeding devices and dialysis equipment to see how fluids are flowing through the tubing with ease.

More importantly, PVC offers high biocompatibility, meaning there are no interactions when in contact with tissue, skin, blood and other bodily fluids. It doesn’t break down when exposed to acidic or alkaline materials and maintains its structural integrity. This ensures pharmaceutical products are safe to be stored in these materials without contamination and other concerns.
PVC is also used in wall coverings, mattresses, and more in hospital rooms since it is easy to clean and sterilize.

In the pharmaceutical industry, the packaging of tablets (blister packaging) is made of PVC to provide protection to medicines sensitive to light, moisture and other environmental conditions. Shortages of PVC products could hinder the delivery of essential healthcare services, potentially leading to public health crises and undermining the resilience of the healthcare system.

Implications of weaponization of PVC
Due to such diverse and widespread use of PVC in our economy stretching from irrigation to infrastructure, healthcare equipment and pharmaceuticals, a compromised supply chain would lead to a colossal threat to the Indian economy.

In FY23, 60% of India’s PVC demand was met by imports. If India continues to be dependent on imports for its PVC requirement, this dependance can and will be weaponized by India’s adversaries thereby threatening 29% of India’s economy including critical sectors such as agriculture and healthcare.

To strengthen India’s supply chain resilience on PVC and to consequently make India impervious to weaponization of PVC, India needs to rapidly build up its PVC manufacturing capacities. Fortunately, the Indian private sector has already lined up over USD 8 billion of investments to significantly enhance the PVC manufacturing capacity of India to a level that will support India’s vision of being a USD 10 trillion economy by 2030.

Unfortunately, India is facing concerted dumping of PVC that is not only threatening the existing PVC capacities but also putting in jeopardy the USD 8 billion investments lined up for future capacities.

Furthermore, collaboration between government and domestic industry is essential to develop contingency plans, promote sustainability initiatives, and ensure the uninterrupted availability of PVC across India.

While we have the Indian military defending our borders, our trade policies need to defend our industries. We have already seen the impact of sanctions on our economy, post the nuclear tests, and have again seen the impact of supply-chain disruptions during the Wuhan COVID pandemic.

It would be irresponsible to not defend our supply-chains for critical materials such as PVC. While the current PVC industry is already reeling under the onslaught of dumping, it threatens future capacity enhancements. India needs to defend the industry from such an onslaught and to protect future domestic investments into capacity enhancements.

This article first appeared in ET Government,