Packaging industry is bullish about budget

The Union Budget 2025-26, unveiled by union finance minister Nirmala Sitharaman on 1 February 2025, has presented transformative measures aimed at accelerating economic growth, boosting consumer spending. 

Boosts consumption and sustainability in packaging through tax reforms
Jeevaraj Pillai of UFlex, noted, "We appreciate the government’s focus on increasing disposable income through revised income tax slabs, which will inject more liquidity into the market. This move is expected to boost the consumption of Fast-Moving Consumer Goods (FMCG), including packaged products, creating a ripple effect that benefits the packaging industry.

Commenting on missed opportunities, Pillai also added that, “While the budget has taken several positive steps, additional support in key areas could have further accelerated industry growth. For instance, tax incentives for eco-friendly materials, subsidies for advanced recycling units, and stronger incentives for meeting Extended Producer Responsibility (EPR) targets would have significantly boosted the transition toward sustainability. Additionally, encouraging investments in recycling infrastructure through CSR provisions, interest subvention for loans, and increased funding for R&D in sustainable packaging could have provided a much-needed push for the sector.”

Strengthens MSMEs and promotes clean energy for global competitiveness
S Sunil Kumar of Henkel Adhesive Technologies India lauded the rationalisation of customs tariffs and focus on Micro, Small, and Medium Enterprises (MSMEs) and said, “The strategic and forward-thinking approach fosters a pro-business environment that encourages both Foreign Direct Investment (FDI) and domestic investment.”  Kumar added, “The ambitious 100 GW nuclear target represents a bold commitment to sustainable growth, driving investments in infrastructure, technology, and human capital, while positioning India as a leader in clean energy on the global stage.” He stated that the emphasis on skill development across industries will create thousands of jobs and build a robust workforce.

Budget 2025 aligns with circular economy goals
Saurabh Agarwal of Avery Dennison, said that the budget presents ‘exciting opportunities’ for the packaging and labeling industry.  Agarwal said “The government's commitment to improving manufacturing infrastructure and enhancing the ease of doing business will help packaging companies, including small and medium enterprises, scale up their operations and innovate more efficiently. As a leader in material science, Avery Dennison India is poised to support India's transition toward more responsible and sustainable packaging, in line with the global push for a circular economy. We are excited to be part of this movement as India looks to build a more sustainable future while maintaining its position as a competitive manufacturing hub.”

Budget fuels innovation in packaging solutions
Manjusha Singh of Siegwerk India, said “Government’s continued momentum towards food processing, with an establishment of a National Institute of Food Technology, Entrepreneurship and Management in Bihar, will promote efficiency and innovation in the sector. We perceive this development as an opportunity to contribute through cutting-edge, safe, and environmentally friendly packaging ink solutions for specific requirements of changing times in the FMCG sector.  With an additional momentum towards India becoming a global hub for toys, it is in tune with a larger purpose of localised development of manufacturing that opens an opportunity for packaging and product innovation.”

Drives MSME growth and global manufacturing ambitions
Neeraj Jain of Cosmo First Limited welcomed India’s revised personal income tax structure as a catalyst for increased consumer spending, while highlighting the budget’s focus on bolstering the MSME sector. He noted, “With more than 45% exports from MSMEs, and the new export promotion mission, this will aid the sector’s competitiveness in domestic and global markets. Further, the focus on enhancing the technology upgradation and global supply chain integration looks promising for multiple sectors as we head towards becoming a manufacturing and export led country. This perfectly aligns with the industry’s projected growth trajectory towards $36.29-billion market size by 2032. For domestic packaging manufacturers, we believe this budget will enable us to better compete in international markets, and enhance the vision of Make In India for India and for the world.”

Key highlights of Budget 2025-26
In a major announcement, the budget revised tax slabs and announced nil income tax up to 12 lakhs—expected to enhance consumer spending on FMCG products, indirectly affecting the demand for packaging solutions. The establishment of a National Institute of Food Technology in Bihar is also expected to indirectly benefit the packaging sector by improving food processing efficiency

When it comes to Micro, Small, and Medium Enterprises (MSMEs), the government has proposed enhancements in credit facilities and guarantees, including increasing the credit guarantee cover for micro and small enterprises from INR 5-crore to INR 10-crore.

The budget did not allocate incentives for manufacturing eco-friendly materials and recycling infrastructure for paper and plastics. However, there was a noted change in custom duties on the import of waste and lithium-ion batteries and the scraps of 12 critical minerals. It also announced a new export promotion mission aimed at enhancing the competitiveness of MSMEs in both domestic and global markets.