Plastics are widely used in the packaging sector owing to their incredible properties such as durability, light-weight, strength, and cost-effectiveness. The application of plastics in the packaging industry can be found in a multitude of sectors such as healthcare, consumer goods, electronics, construction, travel, household, food, and beverages.
The Indian packaging industry, which constitutes about 4 % of the global packaging industry, has been growing at an annual rate of 13 percent and is expected to touch $32 billion by 2020. Global packaging market is estimated at $771 billion expected to go up to $925 billion by 2020.
With its high growth rate, India is becoming a preferred hub for the plastic packaging industry. Currently, the 5th largest sector of India’s economy, the industry has reported steady growth over past several years and shows high potential for much growth, particularly in the export market, according to Packaging Industry Association of India (PIAI). Costs of processing and packaging food can be up to 40% lower. This combined with India’s resources of skilled labor, make it an attractive venue for investment.
The per capita packaging consumption in India is quite low at 8.7 kg, compared to countries such as Germany and Taiwan where it is 42 kg and 19 kg, respectively. However, organized retail and a boom in e-commerce, are offering huge potential for future growth of retailing, and are giving a boost to the plastic packaging sector.
The packaging industry is mostly thriving in second-tier cities where plastic packaging plays an important role in the launch of new products. The increasing number of joint ventures and partnerships between local and foreign firms is also propelling demand for plastic packaging in India. This growth is largely driven by its low cost and flexibility to suit multiple shapes and sizes, convenience, and low-carbon footprint on the environment as compared to Rigid Plastics.
The increasing prominence of low-density flexible plastic in high protein foods is expected to drive the growth in the future. Growing consumerism and demand for value-for-money products are driving the packaging industry to develop innovative solutions, leading to cost-savings. Furthermore, India is among the top ten plastic packaging consumers in the world. The low level of per capita plastics consumption in India is indicative of the massive growth potential of the plastic industry. Given the rising consumerism and modern lifestyles, it is expected that per capita consumption will be doubled in the next five years, according to the FICCI-TSMG report.