Packaging industry’s budget 2024 wish list

Tax initiatives, focus on sustainability, infrastructure upgrade

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budget
representative image of financial report. Photo IStock

As the Indian government presents the interim budget on 1 February, representatives from the packaging world and allied industries have put forward their wish list, which includes tax initiatives, focus  on sustainability and infrastructure upgrade.

Pankaj Poddar, Group CEO, Cosmo First, a global name in specialty films and an emerging player in specialty chemicals, says India’s packaging industry holds substantial potential to transition into a net exporter.

“Realizing this potential necessitates crucial government support, and we anticipate pertinent announcements in budget 2024. Considering the valuable contributions and opportunities the sector presents to the market, the implementation of production-linked incentive (PLI) benefits in areas where India is a net importer—such as capacitor films, battery separator films, PEN films, etc.—can serve as a transformative force for the industry. Additionally, as India progresses towards the shared objective of Atmanirbhar Bharat, extending the sunset clause on lower tax benefits for new manufacturing entities by two years will incentivize capital expenditure, fostering confidence within the industry.

Poddar said the industry urgently requires the establishment of a plastic university equipped with state-of-the-art infrastructure.

“This will support in creating and bringing fresh talent for the industry, and attract plastic machinery manufacturers to establish their operations in India. However, challenges persist in the plastic processing industry and with Extended Producer Responsibility (EPR), acting as a roadblock. These challenges can be effectively addressed by establishing waste collection, segregation, and recycling infrastructure across all towns, cities, and villages. We anticipate the government’s proactive approach in addressing these issues and providing essential support to the industry in the upcoming budget.”

Neetika Suryawanshi, CFO at Pakka Limited, a manufacturer of compostable packaging solutions, says they anticipate a budget prioritizing capital expenditure to foster essential production capacity growth across industries.

“Urgently needed is the stimulation of industrial growth, particularly in the packaging sector and sustainability-related industries. Government support, encompassing infrastructure development, tax incentives, and funding for research & development, is crucial. Substantial investments in R&D are imperative to enhance technical skills, meet stringent quality standards, and broaden capabilities across diverse sectors. What defined India’s next in terms of growth will be driven by innovation, invention specifically around sustainability,”  Suryawanshi said.

On the other hand, S Sunil Kumar, country president, Henkel India, a provider of adhesives, says in the interim union budget 2024, they anticipate strategic initiatives that will propel India’s transition to a sustainable and decarbonized landscape. 

India’s packaging industry is on the verge of a transformation, projected to reach US$130 billion by 2026 at a remarkable CAGR of 10.2%…Policy support for a circular economy, robust recycling infrastructure, and widespread adoption of eco-friendly practices have the potential to significantly shape the industry’s path to a greener, more resilient future. Such comprehensive measures would help companies like Henkel to drive progress towards a circular economy by creating high-performance adhesive, sealant and functional coating solutions for smarter packaging, and thereby, not only promote industry growth, but also serve as a catalyst for creating a sustainable tomorrow.

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The capacity for flexible film manufacturing in India increased by 45% over the past four years. With orders in place, we expect another 20% capacity addition in 2024 and 2025. Capacities in monocartons, corrugation, aseptic liquid packaging, and labels are growing similarly. As the consumption story returns over the next six months, we expect demand to return and exceed the growth trajectory of previous years. The numbers are positive for most of the economies in the region – and as shown by our analytics, our platform increasingly reaches and influences these.

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