Answered: What are the challenges faced by Food Packaging industry in India? Critically examine the steps taken by government to boost this sector.

India, standing first in agricultural production volume and with increasing shift in income bracket leading to habit of eating away from home the need for food packaging to increase their shelf life and reduce wastage can be felt. The Indian packaging industry growing at a rate of 10% though envisages a rapid growth is facing following challenges:

  • Raw material dependence:Increasing import dependence for packaging material.
  • Packaging technology: Unlike develop countries, we still lack packing technique to store the food products. Developing new packaging techniques requires innovation and huge investment in infrastructure and machinery.
  • Packaging standards: BIS standards used by Indian Packaging Industry are voluntary and the need for mandatory standards is required for improving exports.
  • Also packaging for few products like Tea, Spices are following old standards.
  • Research: Lack of innovation, resulting is not much alternative packaging material that is being used in developed countries.
  • No control over pricing: With WTO commitments the industry which once had domestic monopoly ended up as oligopolistic market with little or no control over buyers who have access to world market.
  • Fragmentation: As packaging is mostly in MSME there is lack of presence of large players who can invest for adding greater value to the industry.

Having noted the significance of the food packaging industry government has taken following steps to address some of the challenges:

  • Budgetary allocation: Inorder to promote greater investments in packaging machinery, budget 2015-16 has reduced the excise duty on plant and machinery to 6% from 10%. Though it’s a significant, the industry needs greater investments.
  • 100% FDI: Though govt has allowed for 100% FDI in Food Processing through FIPB (Foreign Investment Promotion Board) not much of the investment is flowing into packaging industry.
  • Review on packing standards: Union Commerce Misnistry has constituted an expert committee with importers and packaging players to formulate new mandatory food packaging standards as against the current voluntary BIS.
  • Specific focus on exports: Specific products with export value as spices has been identified for upgrading their packing standards to meet the international standards. But still efforts are needed to be made in that direction.
  • Initiatives under Make In India, Start up and Stand Up schemes, Zero Defect Zero Effect helps to improve the indigenousness in quality packaging. Eg: Isotropic Polyester Film; use of Nanotechnology in Packaging.
  • Indian Institute of Packaging to set up new mandatory standards to match import standards of developed markets. But abiding to the standards requires greater efforts towards technology upgradation.

Though advances as Isotropic polyester film packing, modified atmospheric packing and use of nanotechnology are noteworthy addressing the challenges would not only boost the sunrise industry but also provide huge employment as well as provide affordable packing.


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