MNCs want Maharashtra to soften plastic ban

Multinational companies like Amazon Inc (AMZN.O) and H&M (HMb.ST) are lobbying to soften a ban against single-use plastic imposed by an Indian state last week, according to four sources familiar with the matter.

The ban by the state of Maharashtra, home to India’s financial capital of Mumbai, could sharply raise costs for companies that rely heavily on plastic for packaging, such as retailers, beverage makers and sellers of bottled water.

Maharashtra’s move, the first such broad action against plastic by an Indian state, comes as Prime Minister Narendra Modi pushes a plan to completely end the use of single-use plastic in India by 2022. Plastic packaging accounts for nearly half of all plastic waste globally, and much of it is thrown away within just a few minutes of its first use, according to the United Nations.

Representatives of companies including Amazon, H&M, Pepsi (PEP.O) and Coca-Cola (KO.N), as well as plastic industry bodies and lobby groups, met with Maharashtra government officials days before the ban came into effect on June 23, urging them to implement the rule in phases and relax some norms, said the four sources who declined to be named.

“Our demand to the government is: give the industry seven years to come up with alternatives,” said Neemit Punamiya, general secretary of the Plastic Bags Manufacturers Association of India, who attended the meeting. “It cannot happen overnight - we’ve got investments, we’ve got loans to pay and people to manage.”

The Federation of Indian Chambers of Commerce and Industry, whose members include online retailers such as Amazon India and Flipkart, said in a June 7 letter to the state government that such a ban “will not be without its own share of adverse environmental impacts which are largely driven by issues associated with the use of alternatives.”

The Internet and Mobile Association of India, which also counts Amazon and Flipkart as members, said it had asked the state to ease the rules but did not specify what relaxation it was seeking.

Beverage makers such as Pepsi and Coca-Cola, meanwhile, want an exemption from the rules as they mandate a buyback of empty bottles at a guaranteed price, which will raise costs, another source familiar with the talks said.

Amazon, Flipkart, Pepsi and Coca-Cola did not respond to requests for comment. H&M said in a statement that it supported reusing and recycling, adding that the company had asked the government to clarify the rules and for help coming up with solutions.

Maharashtra’s environment minister said Wednesday that the government would relax rules for neighborhood grocery stores allowing them to pack commodities such as rice and pulses in plastic. They would, however, have to ensure buyers return the packaging for recycling.