Paper & Packaging

Packaging is currently the 5th largest sector of Indian economy and is projected to grow at a compound annual growth rate (CAGR) of 26.7% to reach US$ 204.81 billion by 2025.

Advantage India

Robust
Demand

*The nation's increasing focus on food safety and quality is projected to fuel the food processing sector, which will increase demand for packaging.

* The India Packaging Market was estimated to be worth US$ 50.5 billion in 2019 and is projected to grow at a Compound Annual Growth Rate (CAGR) of 26.7% to reach US$ 204.81 billion by 2025.

*India continues to lead the global paper market, with domestic consumption of packaging paper and paperboard growing at 8.2% in 2023-24.

Innovation Towards
Sustainability

*The Council of Scientific and Industrial Research (CSIR) has launched the National Mission on Sustainable Packaging Solutions, aiming for a net-zero future through innovation. Led by CSIR-NIIST, the initiative focuses on developing sustainable materials, recycling methods, and advanced testing facilities to enhance India's packaging sector and address environmental challenges.

Increasing
Investments

*SIG, a Swiss based packaging company, laid the foundation of first aseptic carton packs in Ahmedabad in 2023 and plan to invent a sum of Rs. 880 crores over the period of 2023-2025.

*FDI inflows in the Paper and Pulp (including paper products) during April 2000 to March 2024 was US$ 1.71 billion.

Policy
Support

*As the packaging industry stands as the fifth largest industry in India, the government plans to adopt several initiatives that focus on the sustainability manufacturing methods, minimizing of plastic packaging and adoption of sustainable material for the packaging industry.

Snapshot Showcase Infographics Reports

Last updated: Jan, 2025

Paper & Packaging Industry Report

Nov, 2024

Industry Overview

Packaging currently stands as the fifth largest sector in the Indian economy, reflecting its pivotal role in driving industrial growth and innovation. With an annual growth rate of 22-25%, the industry has become a preferred hub for packaging solutions, bolstered by advancements in technology and infrastructure. Notably, the industry boasts a robust structural framework, comprising over 900 paper units with an installed capacity of nearly 4,990 thousand tons. Furthermore, India is home to 861 paper mills, with 526 operational units, showcasing the nation's significant capacity for paper and paperboard production.

Foreign Direct Investment (FDI) and Innovations

The government's progressive policies, including permitting 100% FDI through the automatic route, have stimulated foreign investments in the packaging sector. FDI inflows in the Paper and Pulp industry totalled US$ 1.73 billion from April 2000 to June 2024, highlighting investor confidence in India's packaging landscape. Innovative ventures, such as SIG's establishment of the first aseptic carton packs in Ahmedabad, underscore the industry's commitment to technological advancements and sustainability. With plans to invest Rs. 880 crores (US$ 106.02 million) between 2023 and 2025, SIG exemplifies the industry's drive towards pioneering solutions.

Sustainability Initiatives and Market Trends

In response to global sustainability imperatives, the packaging industry in India is undergoing a paradigm shift towards eco-friendly practices and materials. Government initiatives aimed at minimizing plastic packaging and promoting sustainable manufacturing methods are driving industry-wide transformation. Additionally, the industry's focus on food safety and quality aligns with the burgeoning food processing sector, amplifying demand for innovative packaging solutions.

India continues to lead the global paper market, with domestic consumption of packaging paper and paperboard growing at 8.2% in 2023-24.

The Council of Scientific and Industrial Research (CSIR) has launched the National Mission on Sustainable Packaging Solutions, aiming for a net-zero future through innovation. Led by CSIR-NIIST, the initiative focuses on developing sustainable materials, recycling methods, and advanced testing facilities to enhance India's packaging sector and address environmental challenges.

Market Dynamics and Future Projections

The expansion of the middle class, enhancements in supply chain infrastructure, and the rise of e-commerce platforms are primary factors driving the packaging industry's growth trajectory. Furthermore, the increasing market size of packed food products, projected to reach US$ 3.4 billion by 2027, underscores the industry's pivotal role in supporting diverse sectors. As the industry continues to evolve, leveraging technological innovations and sustainable practices, it is poised to contribute significantly to India's economic landscape.Investments/ Developments.

Recent Developments

The latest report, “Flexible Packaging Market in India 2024-2028,” highlights a substantial expansion, anticipating the market to surge by US$ 15.6 billion over the next five years at a CAGR of 12.7%, propelled by heightened demand in the FMCG sector.
February 2023: Cosmetics and hair care brand Revlon developed a new package for its 'Top Speed' hair color range exclusively for the Indian market. The brand unveiled a new visual identity for products across India in the coming years.
September 2022 - WestRock Company, a sustainable paper and packaging solutions provider, acquired an HP PageWide T1190 Press to complement and expand its portfolio of corrugated printing capabilities. The HP PageWide T1190 Press is expected to enable WestRock to disrupt the corrugated packaging supply chain and offer superior value to its customers.
May 2022: Huhtamaki set up its first recycling plant in Maharashtra, India, as part of its CloseTheLoopinitiative. The site is spread across 2,000 square meters and has recyclers around 1,600 kg of post-consumer-used flexible plastic waste daily since it became fully operational. The recycling plant was set up with an investment of US$ 1.18 million as part of the Huhtamaki Foundation's CloseTheLoopinitiative to tackle post-consumer waste and deliver a valuable secondary resource material. It was expected to process post-consumer waste to create resin to produce refined compounds for use in household products for consumers in India.
SIG, a Swiss based packaging company, laid the foundation of first aseptic carton packs in Ahmedabad in 2023 and plan to invent a sum of Rs. 880 crores (US$ 106.02 million) over the period of 2023-2025.

Government Initiatives

The government has launched the National Packaging initiative which focuses on the following measures to promote the sector:

Set up guidelines and certain requirements for design and material of packaging used.
Promote the process of moving in bulk quantities.
Focus on promotion of centralized industrial activity by encouraging application of necessary and sophisticated infrastructure such as specialized logistic parks with appropriate facilities as well as packaging labs to work on designs and carry out tests.
Encourage processes to reduce packaging waste by establishing material recovery facilities (MRFs).
Support domestic business to manufacture sophisticated packaging materials.
Develop training facilities and certified programs of the highest order to maintain availability of skilled labour.

Road ahead

The outlook for the paper and packaging industry in India is optimistic, driven by several factors including the country's growing population, increasing urbanization, and rising disposable incomes. The rapid expansion of e-commerce is fueling demand for packaging materials, while a growing focus on sustainability is prompting the industry to innovate greener solutions.

Government initiatives like "Make in India" and infrastructure development projects are expected to boost manufacturing activities and streamline supply chains.

Technological advancements are enhancing productivity and quality, while rising export potential offers opportunities for market expansion.

Despite challenges such as fluctuating raw material prices and competition from alternative materials, strategic investments and a commitment to sustainability can help the industry capitalize on opportunities and strengthen its position in the global market.

Growth of financial service sector in India

Note: Conversion rate used in October 2024, Rs. 1 = US$ 0.011

References: Media Reports, Press Releases, Deloitte report, Department of Industrial Policy and Promotion website, India Paper Manufacturer Association (IPMA), Packaging Industry Association of India (PIAI), Indian Flexible Packaging & Folding Carton Manufacturers Association (IFCA), All India Plastic Manufacturers Association (AIPMA)