KIT: Food packaging in India

Strategic tools for the practising manager

Indian food and FMCG packing market has witnessed a growth of 15-20 per cent year on year, this is preliminary due to the factors like increasing nuclear family system, increasing youth population and spent, health awareness among society, product diversification and new product development and acceptance. The sector also aids in reducing waste, fetching better returns to farmers and also improves the end product delivery to the consumer.

Key challenges:
The growth of food packaging sector is hampered by many challenges, high taxes and elevated import duty tops the chart. High taxes on packaging materials of food & FMCG products is not only hampering the growth of the sector domestically but also making the country’s products uncompetitive in global markets. Indian packaged food & FMCG products faces stiff competition from low taxation countries such as China and Thailand in global market.

Apart from high taxes, lack of indigenous suppliers of quality packaging materials also restricts the sector growth.

Absence of technology also acts as a major challenge. For supply of latest packing technology as well as indigenous packing material Indian market depends on imports and that adds on additional cost. The high cost also restricts infusion of many latest technologies in the domestic market. Some of the latest technologies available in the developed countries such as active packaging and smart packaging have to be imported and introduced to India now. The domestic market needs to acquire and customize these technologies the Indian way so that the costs can be brought down and affordability can be achieved from domestic food processor and FMCG products manufacturers.