An important sector of the economy, the Indian packaging industry is adding value to various other segments like manufacturing, agriculture and FMCG. With the global packaging industry expected to grow to US $820 Bn by 2016, the Indian packaging industry is also growing at an approximate rate of 15% annually. It is projected to become the fourth-largest packaging market in the world, with revenues of US$43.7 billion in 2016. This growth can be attributed to the rising consumer demand, fast growing retail sector and new technology & innovation.
Globally, the industry is facing various challenges of meeting the consumer preferences and driving sales of different products. The industry has adopted various upgraded technologies such as aseptic packaging, retort packaging and biodegradable packaging to enhance the shelf life of food products. More than 600 to 700 types of packaging machines and equipments are manufactured by SME sector. This emerging opportunity for the packaging industry is giving rise to new prospects in India. The key drivers of the growth are increasing disposable income, rising consumer awareness and demand for processed food. Besides, the multinational giants are taking rapid strides in the food, beverages, cosmetics, toiletries and pharmaceuticals space. The increased presence of global multinational companies in India has resulted in high and sustained growth of this sector. The fast increasing Indian middle class & the expanding organized retail sector are the catalysts for growth of the packaging industry. According to Mc Kinsey Report, the Indian middle class population is expected to reach 583 million by 2025.
The sector holds great opportunities for large players, however, there are challenges due to lack of regularity clarity arising from multiple legislations that define the sector. There is a need to meet more stringent packaging norms laid down by the entry of global players such as Walmart and the rising consumer awareness on sustainable packaging which requires a shift towards green materials, it said, stressing upon the need for more investments in research and development.
According to industry estimates, there are more than 22,000 registered packaging companies in India of which more than 85 per cent are small and medium units. This emerging opportunity for the packaging industry is giving rise to new prospects.
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