Aug 24, 2017

For industry statistics, industry events and more news on the Packaging Industry in India, click Packaging Industry Expertise.

Packaging was the 5th largest sector of India’s economy in 2016 according to the Packaging Industry Association of India (PIAI).  Growing at 22-25% annually, the sector is expanding at a fast pace, indicating that the country is becoming an increasingly attractive location for investments in this field.

The recent implementation of the Goods and Services Tax (GST) has changed the environment of the industry. The tax will convert the country into a single market place. This eliminates transport detours, triggers warehouse consolidation and will thus lower procurement prices as well as the burden of bureaucracy. Furthermore, growth in many other industries due to the effects of GST will contribute positively to the growth in the Packaging Industry. Most noticeable, sectors like FMCG and e-commerce have benefitted from GST implementation and are projected to see healthy growth. Further, inspired by government campaigns like “Make in India” to promote the country as a manufacturing hub and increasing ease of doing business in India are resulting in growth of several industries. For instance India is the fastest-growing smartphone market in the world and mobile users are expected to hit 1.4 billion by 2021. Many global smartphone manufacturers are setting up manufacturing facilities in India. These industries being extensive users of packaging material, growth in these industries will in turn not only raise the demand of packaging goods, but also increase demand for semi-automatic and fully-automatic packaging machinery.

Falling crude oil prices are another driving force likely to boost plastic and packaging sectors. As plastic is derived from petroleum refining products, lower cost of oil will result in lower cost of plastic raw materials used across product manufacturing units to produce finished goods. Currently, many plastic companies are increasing the capacity of roto-moulded products and protective packaging products for expansion of industrial components in order to sustainably enhance their businesses. Domestic consumption of plastic is expected to reach 20 million tonnes by 2020. Consequently, India’s packaging industry still has a huge potential to grow and is expected estimated to be around $73 billion in FY2020.Plastics comprise 42% of the total packaging material pie for the Indian market, about 50% of this is flexible plastic packaging.

In a research project conducted by the Print Industries Market Information and Research Organization (PIMIR), India is quickly rising in the ranks of the print packaging industry – from being the eighth largest market in 2011 to fifth in 2016. Moreover, India is said to be in pole position out of the 10 fastest-growing print packaging markets in Asia-Pacific and is projected to grow at an impressive average rate of 12.4% from 2016-2020. According to the study, India will become the fourth largest market, ahead of Germany by 2020 and will surpass Japan after 2020, ranking third worldwide. Numerous international food and consumer brands such as Unilever, Nestle and Pepsi are targeting investments in the Indian market.

India’s Packaging Industry gives a positive outlook for investments. The country’s low level of costs, which are almost up to 40% lower in processing and packaging food than in Europe, is one of the key drivers for further expansion, particularly in the export market. In addition, India’s resources of skilled labor make it a preferred destination for the packaging industry. Government campaigns and growth of industries that have high demand for packaging are inspiring many foreign companies to invest in India. Scotland-based PG Paper Company Ltd, which provides customized paper solutions, plans to invest 3 million pounds-sterling in setting up three mills to manufacture packaging paper in India by 2018. The European packaging major in high-tech and innovative packaging, Guala Closures has acquired Karnataka-based Axiom Propack.  The deal will help the Italian multinational firm fortify its position in the Indian market. The opportunities for the Packaging Industry are very versatile and range from FMCG to healthcare to e-commerce, among many others and the industry will enjoy guaranteed growth in the coming years.

For industry statistics, industry events and more news on the Packaging Industry in India, click Packaging Industry Expertise.