An overview of the paper and paperboard packaging industry in India

An overview of the paper and paperboard packaging industry in India

- The long-term demand outlook for paper in the Indian market remained moderately positive, due to the relatively low per-capita consumption compared to global averages.
- The flexible packaging market in India is projected to expand by USD 15.57 billion from 2023 to 2028, with a CAGR of 12.69%.

The Pulp and Paper Times

Indian paper industry overview

The pulp and paper market in India was valued at USD 14.75 billion in 2023 and expected to reach USD 35.57 billion by 2030, growing at a CAGR of 13.4% during the time spanning 2023 to 2030. The market value of the Indian paper industry was forecast to peak USD 19.1 billion in 2033. Among the various business segments within the paper industry, the packaging industry fared well across application segments like the pharma sector and FMCG, catalysed by e-commerce.

The Indian paper industry’s volume growth is expected to have declined to a 2-5% range in FY 2023-24 as against ~7% in FY 2022-23. Besides, the industry’s revenues were projected to have declined by ~7-10% in FY 2023-24 amid a decline in realisations. The realisation levels in the packaging paper segment (more than 60% of total demand) witnessed a decline starting from the second quarter of FY2023, as the input prices and rising competition softened. This trend continued in FY 2023-24 as well.

Outlook 

The long-term demand outlook for paper in the Indian market remained moderately positive, due to the relatively low per-capita consumption compared to global averages. The implementation of the New Education Policy (NEP) is expected to stimulate demand for printing and writing paper. The increasing use of specialised and traditional packaging in FMCG, healthcare, e-commerce, pharmaceuticals, and consumer industries is expected to drive demand; a focus on innovative and visually appealing packaging, and ongoing transition from plastic to paper-based packaging in the FMCG and food product sectors is expected to catalyse demand as well. (Source: Maximize Market Research, ICRA, Financial Express)

India paper and paperboard packaging industry

The India paper and paperboard packaging market was valued at USD 12.87 billion in 2024 and is forecast to reach USD 17.74 billion by 2029, growing at a CAGR of 6.63% between 2024 and 2029. The growth of the market is dependent on a shift towards flexible packaging on account of high logistics costs, growing retail demand, and increase in the demand for digitally printed packaging.

India has more than enough capacity to produce nearly all grades of paper, yet large imports are threatening the financial health of many mills. Of the over 900 paper mills in the country, only 553 are currently operational. Imports, particularly paper and paperboard from ASEAN countries, enter India duty-free under the ASEAN-India Free Trade Agreement. Additional duty concessions from ASEAN and Korean FTAs, as well as tariff concessions to China under the Asia Pacific Trade Agreement (APTA), have further stimulated paper imports. Subsidies provided to paper mills in some of these countries give them a pricing edge over Indian mills.

For the fiscal year 2023, India exported paper and paperboard products worth around USD 3.04 billion. Conversely, the export value of pulp and waste paper was the lowest at USD 3.59 million. In 2023, India’s per capita paper consumption was about 15 kg. The Indian paper industry contributes 5% to global production, suggesting significant potential for growth.

The flexible packaging market in India is projected to expand by USD 15.57 billion from 2023 to 2028, with a CAGR of 12.69%. There is a growing demand for paper, particularly in the packaging of FMCG products and ready-to-eat foods. Packaging-grade paper represents 55% of the primary types of paper produced in the domestic paper and paperboard industry. In FY 2023-24, the volume of packaging paper was expected to increase by 6-8%, driven by demand in the pharmaceutical and FMCG sectors. Meanwhile, the volume of writing and printing paper grew by a modest 3-5% due to increased digitalization.

The sector’s growth is fuelled by increases in e-commerce, food processing, pharmaceuticals, FMCG, manufacturing, and healthcare. Furthermore, various government initiatives, including ‘Make in India’, have positively influenced the packaging industry. The paper and packaging industry ranks as the fifth largest sector in the Indian economy. (Source: Mordor Intelligence, Technavio, Print Week India, Economic Times, Statista)

Wastepaper-based paper manufacturing in India

The demand for pulpable wood in India in FY 2022-23 stood at 11 million tons, which is expected to reach 15 million tons by 2024-25. The availability of the product is pegged at 9 million tons. However, India’s wastepaper collection/recovery is a mere 38% as against 68% in the US.

The paper industry uses wood, agro residues (such as straw and bagasse) and waste paper (imported as well as domestic) as input substrates for production. Currently, in the total production, the share of wood, agro and waste paper-based mills stand at 18%, 7% and 75% respectively. Imports of wastepaper grew by 11.62% in terms of quantity and 9.90% in terms of value in FY 2022-23.

Currently out of 125 newsprint mills in India, 46 have stopped the production of newsprint. The present domestic installed capacity of newsprint stands at 2.2 million tons. The imports of newsprint in the country for FY22 and FY 2022-23 stood at 0.61 million tons and 0.62 million tons respectively. Around 50% of the required newsprint in the nation was met through imports.

Writing and printing paper industry in India

The Indian writing and printing paper market was valued at USD 2660.00 million in 2021 and is expected to reach USD 4502.48 million by 2029, registering a CAGR of 6.80 % during the forecast period of 2022 to 2029. The market has expanded significantly in recent years due to the swift adoption of packaging solutions and an increase in home delivery services across various regions. Writing, printing, and specialty paper are essential for protecting and transporting a diverse range of goods. Demand for this paper from catalogues, books, notebooks, industrial printing, stationery, newspapers, magazines, business forms, packaging, and labelling is expected to fuel the growth of the writing, printing, and specialty paper in India. (Source: Data Bridge Market Research)

The above report on Indian paper and paperboard packaging industry has been extracted from Emami Paper Mills’ Annual Report 2023-24
 

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