The plastic industry contributes to nearly every daily requirement of individuals, whether it is apparel, housing, construction, agriculture, furniture, etc. In the past few years, the Indian plastic industry has grown by 13% annually & identical growth is projected even in the near future. Presently, there are more than 30,000 legalized plastic processing facilities. The following section in this article will talk about the scope and legalities related to the Plastic export business.
Analyzing Export figures for the Plastic Industry
- The Indian plastic industry manufactures and ships a diverse range of raw materials, polyester films, plastic moulded extruded items, writing instruments, laminates, plastic woven sacks, laminates, consumer goods, laboratory/ medical-surgical ware, PVC leather cloth and sheeting, & and travel ware, among other products.
- India shipped plastic-based raw material that was worth around US$ 280.38 million in Mar 2021, & the export during Apr 2020 to Mar 2021 stood at US$ 3.29 billion.
- The overall plastic & linoleum export from Apr 2020 to Mar 2021 was accounted for US$ 7.45 billion & for Mar 2021; it was US$ 719.15 million.
- In Apr 2021, the overall export valuation of plastic & linoleum was accounted for US$ 726.74 million.
- In FY21 export of plastic plates, sheets, films stood at US$ 1.53 billion & packaging material was US$ 863.62 million.
- The Indian plastic industry adheres to immense potential in terms of infrastructure, capacity, & skilled labour. It is supported by various polymer producers & mould manufacturers in the nation.
- Among the industry’s key strengths is the presence of raw materials in the nation. Therefore, plastic processors do not necessarily depend on imports. These raw materials include high-density polyethene, polypropylene, PVC, and low-density polyethene produced at the domestic level.
- With factors like biodegradable & environmentally friendly, this is only pushing entrepreneurs in the trade to enhance their technology & bring on cutting-edge solutions for the plastic industry. This shift has encouraged entrepreneurs to invest in their R&D facilities and come up with advanced solutions. This will help the plastic export business and other related entities to prepare a diverse and robust product portfolio for global clients.
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Basic Legalities to Commence Plastic export Business in India
Here are some fundamental legalities that one needs to cater for setting up a Plastic export Business in India
Register Your Company
Picking up an apt business structure and get it legalized under relevant by-laws is the first step in commencing a business journey. There are plenty of legal structures available to starts up, which are as follow:
- Private Limited company (suitable for an entity with the moderate scope of operation and management)
- One Person Company ( Perhaps the most popular business structure in India right now as it can be incorporated by one person only)
- LLP (Mainly opted by entities that proposed to be managed by two or more partners)
- Public Limited Company (preferred by establishments having enlarged business footprint and sizeable management hierarchy)
- Partnership Firm
Key takeaways regarding company incorporation/registration
- A partnership deed needs to be drawn up in case of a partnership firm registration. The deed generally entails several clauses that act as a legal framework for both partners. After incorporating the mutually agreed clauses, the partner needs to submit the deed before the ROFs of the respective state.
- For Business structures other than partnership firm & LLP, the applicant needs to visit the MCA’s website and submit an e-form called Spice+. But before engaging with such a process, the charter documents such as MOA and AOA need to be drawn up.
Open the current Bank Account
Once you registered your establishment, the next step is to open the current bank account in a designated bank in the name of the company. The following documents generally accompany the application regarding the current bank account.
- Firm’s PAN
- Copy of Company registration or incorporation
- Board Resolution for Account Opening (in case of OPC, private or public limited company)
- KYC documents and beneficial owner information
- Identification as well as the Address proof of the Authorized Signatories/partners
Get the Import Export Code from DGFT
IEC is a legal compulsion for entities involved with the cross-border trading of goods. IEC is a business identification number that helps identify a business entity operating in an EXIM domain. Undertaking EXIM activities without an IEC number is an offence in India. Thus, the Plastic export business will also need this license before kick-starting their business activities.
Here’s what you need to do to get this license for your private export business
- Reach out for the DGFT’s official portal and click the option “Apply for IEC” located on the home page.
- On the following page, create your account by providing the requested details. Once done, tap on the “Send OTP” option.
- Next, the portal will send the One-Time Password on the submitted contact details.
- Enter the same code in the relevant field on the portal to validate your account.
- Get back to the home page, reselect “Apply IEC”, and log in to the portal.
- Starts filing the e-form for the grant of IEC registration. While doing so, you will be prompted to enter the following details in sequential order;
- Applicant’s Designation in the company
- Bank details such as bank name, account number, IFSC code, and a cancelled cheque
- Preferred sectors of operations
- Acceptance of Undertaking
- Once you provide these details, the portal will prompt you to submit the form either via DSC or Aadhar OTP.
- Lastly, make the payment regarding the application fee.
Documentations to be addressed by the plastic export business while shipping products abroad
The plastic industry is growing rapidly, which is a good sign for any start-ups willing to commence Plastic export business in India. The advancement of the existing technology increased R&D investment, and relaxed government policies also play a pivotal role in the growth of this sector.
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