Packaging Industry in India - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The Packaging Industry in India is expected to register a CAGR of approximately 26.7% during the period (2021-2026). After the COVID-19 pandemic, most developed countries are either burning wastepaper or using it for landfill to avoid coronavirus spread. This has resulted in a huge shortage of raw material for Indian paper mills. The manufacturers of Indian corrugated cardboard boxes are working to keep transport packaging flowing to makers of essential products, including packaging for food and other consumer products, medical and pharmaceutical products, tissue, and hygiene products.

• Further, owing to the rising population, increasing income levels, changing lifestyles, increased media penetration through the internet, television, and growing economy, the demand for packaging is growing. Moreover, it is one of the strongest growing sectors in the country. According to Care Ratings, a prominent credit rating company in India, more than 49% of the paper produced in the country is used for packaging purposes.
• The rapid growth of the market is primarily driven by the pharmaceuticals and foods and beverages industries. Huge investments in the food processing, personal care, and pharmaceuticals end-user industries are creating scope for expansion of the packaging market. According to recent data released by the Associated Chambers of Commerce and Industry of India, the market size for organized packaged food is expected to reach INR 780 million, in 2020, from INR 530 million, in 2016.
• The rise of the Indian middle class, the rapid expansion of organized retail, growth of exports, and India’s rising e-commerce sector is further facilitating growth. According to the Indian Institute of Packaging (IIP), the packaging consumption in India has increased by 200% in the past decade, rising from 4.3 kg per person per annum (pppa) to 8.6 kg pppa.
• In order to further maximize the potential of the packaging sector in India, the government has been continuously consulting the industry experts. For instance, PIAI (Packaging Industry Association of India) has been asked to formulate policies and guidelines that is expected to augment India’s export potential in the international market.

Scope of the Report

The growth of the Packaging Industry in India is largely driven by various logistic applications, technological advancements, and the development of the packaging sector across the country.The report on the India packaging market studies the market segmentation based on different materials, like paper, plastic, glass, and metal. The end-user verticals that have been considered, while studying the market, include food, beverage, healthcare, cosmetics, personal care, and household care and industrial segment.

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Key Market Trends

Food Industry is Expected to Hold Largest Share in the Market

• The food packaging industry in India witnessed major innovations, in terms of branding and packaging. For instance, iD Fresh has introduced Smart Sip Tender Coconut and iD Grated Coconut, in innovative eco-friendly packaging. Many popular brands, like Amul, Mother Dairy, Patanjali, and others, use UV-protected films, color-changing films, and holographic films to reduce the chance of adulterating their products.
• Packaged food is the fastest-growing segment in the Indian packaging industry. It is expected to fuel the demand for plastic packaging, as it ensures food quality, safety, and long shelf life. According to the Federation of Indian Chambers of Commerce & Industry (FICCI), the expenditure on packaged foods is increasing (at inflection point), due to an increase in per capita income, urbanization, and an increase in the number of working women. According to Agriculture and Agri-food Canada, the sales of packaged food in India amounted to USD 76,284.2 million in 2018, and it is expected to register a CAGR of 18% during the forecast period.
• In India, the grocery market is a traditional retail industry, and therefore, the penetration of online retail is even lower. The expenditure on food and grocery accounts for 60% of the total expenditure on retail in India. However, the food delivery and services market is fostering further growth in the country, with players, like Bigbasket, Grofers, Zomato, Swiggy, Scootsy, registering a rapid increase in sales. According to a study conducted by the Ministry of corporate affairs (India), the revenue generated by Swiggy and Zomato in India in FY 2018 was INR 4.42 billion and INR 4.66 billion, respectively.

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