Markets to explore: India
This column, dedicated to Italian companies operating in packaging with a keen eye to the possibilities of growth and development abroad, is born out of the collaboration between ICE-Agency and Edizioni Dativo. The network of ICE offices abroad will provide a regular update on packaging developments in the short/medium term in given countries.
India’s packaging sector has shown growth for some time, highlighted by concerns’ launch of new products with determined accompanying promotional activities. The food and pharmaceutical sectors are the largest packaging consumers by far.
Societal changes
The growth of the packaging sector is driven by the strong performance of the larger economy, very low inflation which incentivizes consumer purchases and spectacular growth in Internet commerce, concentrated in medium and large urban centers (Amazon Flipkart and Snapdeal are the main online “distributors”).
A rapid transformation in the day-to-day habits of the middle class is also contributing to rising packaging consumption: as less and less time is dedicated to preparing meals, purchases of ready and packaged products are driven up, but the spread of liquid foods also influences the numbers in packaging.
Notes on materials and the environment
Plastic continues to be the most widespread packaging type (estimated at 42% of the total market), but the demand for cellulosic packaging for liquids and refills is also gaining ground.
Although growing, attention to protecting the environment and sustainability is still rather limited. However, the request or offer of green packaging is emerging as a possibly promising marketing tool.
Demand for alternative materials (from synthetic polyethylene to polyethylene from cane sugar) that are lighter and more recyclable shows strong growth, but particular attention has been drawn by MAP (modified atmosphere packaging) technologies.
Sector value: projections
According to 2015 data, India’s packaging sector is worth 32 billion USD. However, according to recent estimates by the industry association FICCI, sensational growth is to be expected, reaching 73 billion by 2020, with average annual growth of 18%. Rigid packaging should see more growth (25%) than flexible.
The Indian packaging industry makes up roughly 4% of the worldwide value of the sector. Per capita consumption of packaging is thus very low compared not only to industrialized countries (for example Germany with 42 kg per year), but also other countries in the region (Taiwan with 19 kg per year).
In particular, in 2014, consumption of polymers in India was 10.5 kg per capita whereas in China it was 45.
As historically, Italy and Germany continue to be India’s major packaging machinery suppliers, with China close on their heels in recent years. The latter is quickly consolidating its influence in the Indian market. Below are the customs duties applied to the two codes taken into consideration:
- 842230 - Basic Duty 7.5%; CVD 12%; SPL CVD 4%.
- 842240 - Basic Duty 7.5%; CVD 12%; SPL CVD 4%.
The project is coordinated through ICE-Agenzia’s central headquarters in Rome, the Office of Industrial Technology, Energy and Environment directed by Ferdinando Pastore. Contact: Matteo Masini, tel 06 5992 9356 [email protected]
