The packaging industry in India has played a significant role in recent years in advancing innovation and technology in the nation and enhancing value across a range of manufacturing sectors, including the FMCG and agricultural industries.
Packaging is currently the fifth largest sector of Indian economy. Packaging is among the high growth industries in India and developing at the rate of 22-25% per annum and becoming a preferred hub for packaging industry.
The India Packaging Market was estimated to be worth Rs. 4,39,097 crore (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.
According to current industry data, India now has 861 paper mills, 526 of which are operating, with a total installed capacity of 27.15 million tonnes. Almost 4,990 thousand tons of installed capacity are contained in the more than 900 paper units that make up the industry structure.
India continues to lead the global paper market, with domestic consumption of packaging paper and paperboard growing at 8.2% in 2023-24.
According to The Indian Paper Manufacturers Association, Union Budget 2025-26 focuses on manufacturing and MSMEs is expected to boost demand for paper and packaging materials across multiple sectors and bodes well for the growth of the paper industry.
According to the Invest India Report, India's green packaging market is set to grow at a 7.24% CAGR (2023-2028).
The adoption of smart packaging technologies, including RFID, NFC, and QR codes, is enhancing product authentication and supply chain efficiency
The latest report, “Flexible Packaging Market in India 2024-2028”, highlights a substantial expansion, anticipating the market to surge by Rs. 1,35,642 crore (US$ 15.6 billion) over the next five years at a CAGR of 12.7%, propelled by heightened demand in the FMCG sector.
The expansion of the middle class, enhancements made to the supply chain, and the emergence of E-commerce in recent times are the primary factors responsible for the growth of the packaging industry in India. The nation's increasing focus on food safety and quality is projected to fuel the food processing sector, which will increase demand for packaging.
Exports of Paper & Paperboard in India averaged Rs. 6,371 crore (US$ 732.78 million) from 1996 until 2023, reaching an all-time high of Rs. 27,643 crore (US$ 3179.24 million) in 2021
Export of paper, paperboard and newsprint has increased almost 3 times from 532.7 thousand tonnes in 2010-11 to 1776.2 thousand tonnes in 2022-23.
While India is a significant producer of paper products, it also imports certain types of paper, paperboard, and newsprint to meet specific market demands and quality requirements. This includes specialty papers, high-grade paperboard, and newsprint varieties not readily available domestically.
Import of paper, paperboard and newsprint has grown from 1,785 thousand tonnes in 2010-11 to 2058.7 thousand tonnes in 2022-23.
FDI inflows in Paper and Pulp (including paper products) during April 2000 to September 2024 was Rs. 15,121 crore (US$ 1.74 billion).
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.
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.
The Food and Grocery market contributes almost 70% of the total retail sales. Departmental retail stores in the urban food market and unit packaging n in the rural food markets are key drivers of flexible packaging in the country.
According to USDA Foreign Agricultural Service, the number of traditional retail grocery outlets across India in 2021 was 12.79 million and was expected to surpass 13.05 million by mid of 2023. The growing retail market is expected to boost the demand for flexible packaging in the food segment.
The market size of packed food products drastically increased and is also expected to grow to Rs. 29,563 crore (US$ 3.4 billion) by 2027, as per the reports of MARC India.
In May 2024, Andhra Paper Ltd. signed a Rs. 125 crore (US$ 14.4 million) deal with Sweden’s Valmet AB for a tissue paper production line, following its Rs. 270 crore (US$ 31.1 million) investment approval for a 100-ton daily capacity machine at its Andhra Pradesh facility.
In January 2024, Rigid plastic packaging solutions provider Mold-Tek Packaging Ltd (MTPL) opened three manufacturing facilities in Cheyyar (Tamil Nadu), Sultanpur (Telangana), and Panipat (Haryana). The facilities will increase the business’ capacity to 5,500 tons annually, bringing the overall capacity to 54,000 tons annually by FY25. The company invested about Rs. 100 crore (US$ 11.5 million) in these units.
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.
Outlook:
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.
