India’s flexible packaging market is currently worth $3bn a year, and researchers are expecting further growth, meaning huge opportunities in the sector.
A recent report by PCI Films, The Indian Flexible Packaging Market 2011, predicts that the Indian share of the world market, which currently represents 5%, will continue to grow at around 15% each year until 2015.
Commenting on the report, packaging industry analysts Pira International acknowledged that India “offers enormous potential for packaging growth.”
“Growth in the Indian packaging market offers export opportunities for European packaging equipment suppliers and the possibility for flexible film producers and converters to invest in the country,” added Pira.
“There could however be a longer term threat from cheaper Indian imports of flexible packaging coming into Europe should the Indian market be unable to absorb the growing volume of packaging materials being produced in the country.”
The PCI Films Consulting report commented, “India is, in flexible packaging as in so many other things, a land of opportunity.”
“With only 5% of food currently packaged, and WalMart only last year allowed to move into retail, the opportunities in flexible packaging are clearly enormous.”
Rising consumer demand, a fast growing food retail sector, new technology, and greater investment by domestic and international companies in the food packaging market have all been attributed as factors to India’s growth.
Demand for packaging in India continued to rise during the worldwide recession due to the increase in “packaged good sales at the expense of unpackaged goods,” and the launch of several new products such as soft drinks, alcoholic drinks, and dairy and home care products.
Converting industries are already well established in India, producing European standard flexible packaging as well as a large number of small businesses producing packaging of a much lower quality.
It has been generally assumed by commentators that the Indian flexible packaging market will grow along the same lines as the Chinese market in previous years.
However the report is quick to suggest that, “the dynamics of the two territories are completely different.”
“A bureaucratic and challenging political landscape, an increasing focus on environmental issues and the presence of established players, sometimes owned by the very manufacturers they supply, means that, while it may well be time to ‘dip a toe’ in the Indian market, there are still substantial hurdles to clear.”