Make in India: an impetus for packaging? - The Noel D'cunha Sunday Column

Prime minister Narendra Modi has been urging investors to consider India as a place for production, not just as a big emerging market. There have been moves in the government policies, with a new foreign trade policy (2014-19), which is expected to rev up export with a strong thrust on manufacturing in India, keeping it in sync with the PM’s ‘Make in India’ goal.

10 Oct 2014 | By Noel D'Cunha

There are plans to bring in the transformational national Goods and Services Tax (GST) to make India a more attractive single market. The PM also emphasises on the need to make India a better place to do business, by bringing in bureaucratic changes that will rid red-tapism and archaic rules.

In short, ease of doing business would make ‘Make in India’ possible.

According to reports, in 2010, India’s export crossed the USD 200-bin mark for the first time in its export history. In 2011-12, the figure reached USD 303.7-bin, which made the then government set a merchandise export target to USD 325-bn for 2013-14. At the end of December, 2013, the country had achieved USD 230.34-bn.

According to Dr NC Saha, director of Indian Institute of Packaging in Mumbai, India is exporting commodities in bulk, and when it reaches its destination, it is broken and re-packed in small packages.

Take for instance, tea. India is one of the world’s leading producers of tea, 23% share by volume in 2013. It is among the finest in the world. But tea is exported largely in the form of bulk tea, almost 78% of total exports during 2013-14.

“When the tea is re-packaged, it does not carry the Made in India brand. So the PM’s Make in India goal says, why not pack the bulk as well as the small packets from India and brand it as ‘Made in India’,” says Saha.

In India, there are 33 Export Promotion Councils (EPC), of which 12 EPC are under the Ministry of Commerce, nine under the Ministry of Textile and other commodity boards like tea, coffee, spice boards, etc. All these organisations are working with the same motto, how best we can promote exports.

The government is keen, and acknowledges that the best way to improve exports is through packaging, for packaging to act as a value addition.

Saha says, “The government of India has asked me to submit a prospective plan for the next year that will focus on three major things: First, export promotion through innovative package design and development; second, disseminate the standards to the exporters; and third, enforcing these standards.”

Understanding the gap
Exporters visit overseas exhibitions and when they find an attractively packaged product, they bring it back home and expect the printer to produce it, says Saha. “What they should do ideally is to give the sample along with technical packaging specifications like grammage, dimensions, etc.”

Unfortunately, these standards do not prevail in India. Today, packaging specifications are defined by buyers who give the dimensions and strength. “What we need to do is, instead of getting the specs from the buyer, engage the exporters on what threat he is facing in terms of specifications,” says Saha. “As an institute with a mandate from the government of India, we can make suggestion, draw guidelines and formulate standards, which will become a bible for all the exporters across the country.”

But who will tell the exporters that there are standards that have been developed? “We will need to have workshops and training programmes,” Saha adds.

Merely workshops and training programmes may not translate into its implementation unless there is enforcement. “In order to increase your exports, standards have to be followed, but currently these standards are not mandatory. So we have requested the GOI to make these standards mandatory for the benefit of the exporters so that we do not lose the export market,” says Saha.

Support for print packaging
Saha acknowledges that the print companies in India are at par with the best. “But it’s a question of combination of structural and graphic design,” he says. He gives an example. “We find the Sri Lankan tea packets to be more attractive than the packets we have made. He might have done it with a combination of plastic, paper, bamboo, whereas we made it only from plastic. The creativity is lacking in India and has to be upgraded.”

Saha also believes that raw materials manufacturers have to produce the right kind of materials that will support the Indian print packaging industry, at least where it is possible. “In raw material for packaging, we have scarcity only for paper, because we don’t have soft wood. So, for long fibre papers, we need the pulp to be imported. However, paper and paper boards are available in India. As far as plastics are concerned, we don’t have any problems. But in case of printing ink, for example, there is a need for improvement. “There are Indian-owned as well as multinational companies producing inks in India. These companies will need to produce the type of ink that is available to, say, a print packager in Europe.”

​​Made in India machinery
The other area of concern is packaging machinery. We have about 1,500 manufacturing companies in India. In a nutshell, printing and packaging machinery sector is poor. “Today’s mentality is, if I have got the money why not import, even if it’s a second-hand machine,” says Saha. That’s because quality machinery is not being produced in India.

Saha wishes that Made in India products should be the mantra. “Today, suppose Cerutti is selling 100 machines in India and if the government bans the imports, he will not be able to sell it and the Indian market is lost for him. So, the company will try to come out with a solution, probably start a factory here jointly, or will supply all the spare parts and the assembly here in India.”

Saha concludes by saying that this is exactly what the PM is telling. “Be it an ink company, a paper or a machine manufacturer, you maybe a foreign company, but why don’t you produce your product in my country. This way, I can also use my workforce while helping India produce products packaged in India for exports.”