The packaging industry occupies a critical role in the ecosystem of manufacturing. However, it is silently bearing the brunt of global conflicts in the Middle East. From biscuits on supermarket shelves to life-saving pharmaceutical products, corrugated boxes and protective materials form the backbone of modern supply chains.
Corrugated box manufacturing relies heavily on heat. In a typical mid-sized unit in Faridabad (Haryana), corrugation machines require sustained high temperatures to shape and bond paper layers into sturdy packaging material. Many such units depend on Liquefied Petroleum Gas (LPG) cylinders as a primary heat source. However, the production process is such that the heating stage occurs every alternate day.
A manufacturer we interviewed, in Faridabad, supplying to large clients such as Britannia Industries and several pharmaceutical firms, reports consuming 4-5 LPG cylinders daily. This dependence makes production highly sensitive to fluctuations in fuel prices. On the ground, the erratic supply and allocation cuts have created space for price distortions, with businesses reporting inconsistent deliveries and, in some cases, inflated prices as high as ₹4,000 for one cylinder, charged by intermediaries and distributors. Currently, there is no supply of LPG cylinders to packaging units in Faridabad.
Going a layer deep
Beyond corrugated boxes, packaging often incorporates thermocol (expanded polystyrene), widely used for cushioning fragile goods. The raw material for thermocol, polypropylene (PP), is largely imported into India, with a significant share coming from China. Industry inputs suggest that prices have nearly doubled since the escalation of tensions involving Iran, the US and Israel. For Indian manufacturers, this has created a dual cost shock: rising energy expenses and surging input costs.
While India has made strides in domestic manufacturing, segments like petrochemical derivatives still remain exposed to international market volatility.
The effects of rising packaging costs are not confined to manufacturers alone. FMCG (fast-moving consumer goods) companies and pharmaceutical firms are heavily dependent on reliable packaging and face increased procurement costs. For FMCG giants like Britannia Industries, packaging is a significant component of total cost. . Companies are thus confronted with difficult choices: absorb the cost increase, pass it on to consumers, or redesign packaging to economise. In the pharmaceutical sector, the stakes are even higher. Packaging is not merely functional but regulatory, ensuring product safety, stability, and compliance.
India’s packaging industry is dominated by small and medium enterprises. These firms often lack the bargaining power and financial resilience of larger corporations. As input costs rise, SMEs face a “cost-price squeeze” where production becomes more expensive, but competitive pressures prevent them from raising prices proportionately. The result is a gradual erosion of margins, delayed investments in technology, and in some cases, reduced operational capacity.
Yet, within this disruption lies an unexpected opportunity. Faced with rising LPG costs, some manufacturers are beginning to explore alternative energy solutions, notably solar power. One such unit estimates that installing a basic solar setup would require an investment of approximately ₹30,000-40,000. While modest, this upfront cost represents a strategic shift in how energy is sourced and consumed. The transition is not without challenges. Corrugation processes require consistent and high heat, which solar panels alone may not reliably provide without storage or hybrid solutions. However, even partial substitution, such as using solar energy for auxiliary operations or pre-heating can significantly reduce LPG dependence over time.
Nida and Abhishek are with IILM, New Delhi; Krishan is with Bennett University, Greater Noida
Published on April 8, 2026