New Delhi, May 2 (IANS) High taxes on packaging materials used by the Indian food processing industry is not only hampering the growth of the sector domestically but also making the country’s products uncompetitive in global markets, director of Indian Institute of Packaging (IIP) N.C. Saha said.
‘The government must find ways to bring down the taxes on packaging materials,’ Saha told IANS in an interview.
‘The Indian food processing industry is facing stiff competition from players from low taxation countries such as China and Thailand and the government should find a way to provide a tax holiday to packaging materials used by the food processing industry,’ he said.
‘Apart from high taxes there are two other major issues facing the packaging industry with respect to processed foods,’ Saha said. ‘First, we don’t have indigenous suppliers of quality packaging materials and, second, we don’t have indigenous suppliers of the latest packaging technologies.’
‘In both the areas, we are dependent on imports and that makes them far too expensive for the Indian industry which has to keep down the costs of the final products in order to grow,’ he said.
Saha said India had to import high quality metal sheets and virgin kraft paper, although there were no issues with regard to glass or plastics for both rigid as well as flexible packaging.
‘Some of the latest technologies available in the developed countries such as active packaging and smart packaging have to be imported now. The Indian packaging industry needs to acquire and Indianise these technologies so that costs can be brought down to affordable levels for Indian food producers,’ Saha suggested.
‘The Indian processed food industry should make use of the various schemes of the ministry of food processing industries to get loans and grants and upgrade their packaging technologies,’ Saha said. ‘The scheme for upgrading food laboratories is one such example.’
However, such schemes should be used to step up innovation and develop new technologies, as traditional packaging technologies will not help in the more competitive market that is emerging in India, especially in the form of big format retail stores, Saha cautioned.
(Arjun Sen can be contacted at arjun.s@ians.in)
