Corrugated box manufacturers warn of severe cost surge, call for price revision and policy support

The Federation of Corrugated Box Manufacturers of India (FCBM) has issued an urgent call to action, flagging severe and unprecedented cost pressures that it says are pushing India’s corrugated packaging industry to the brink.

The industry body has urged customers, partners, and policymakers to take immediate note of the crisis and respond with corrective measures.

1. Kraft Paper: The foundation has cracked
Kraft paper constitutes approximately 80% of the total cost of a corrugated box. Over the past months, kraft paper prices across India have surged by 15–20%, triggered by global geopolitical disruptions, supply chain dislocations, and volatility in international raw material markets*. This is not a marginal fluctuation. When your primary raw material, accounting for four-fifths of your cost. escalates this sharply, the impact on the entire value chain could be significant.


2. Ancillary inputs: Every line item has exploded
The pain does not stop at kraft paper. Costs of essential manufacturing inputs, gum, ink, adhesives, staple wire, and strapping wire, have risen by a staggering 30–40%*. Every single box manufactured in India requires these materials. The cumulative effect of these increases, combined with the kraft paper crisis, has created a storm of cost escalation.

3. Conversion costs: No corner left unturned
Beyond raw material costs, manufacturers are absorbing mounting conversion costs. Electricity tariffs have risen sharply, and upward revisions in statutory wages have further squeezed operational margins. The cost of simply running a factory, before a single box is produced, has become unsustainable for a large number of our member units.

4. GST structure adds to industry stress
The Federation of Corrugated Box Manufacturers of India said the industry has been affected by an inverted duty structure within the GST regime, where input taxes exceed output taxes, leading to delays in refund realisation. It added that GST refund procedures are often complex and time-consuming, resulting in working capital being locked up and affecting liquidity for manufacturers.

FCBM further noted delays in receiving GST refunds on input services, even as the cost of these services has risen significantly, which it said has intensified the liquidity crunch. It added that the refund process is often prolonged, disrupting working capital cycles and leaving manufacturers financially strained at a time when resilience is critical.

The industry body has called on customers to recognise prevailing cost pressures and support a minimum 20% price increase in corrugated boxes, describing the move as necessary to sustain operations amid sustained losses. It said the cost escalations outlined are verifiable, substantial and industry-wide, leaving little room to absorb further shocks.

FCBM noted that corrugated boxes play a critical role in India’s supply chain, spanning sectors such as food, pharmaceuticals, electronics, e-commerce, and exports. It cautioned that stress in the packaging sector could have wider implications across industries, adding that customers’ operations are closely linked to the health of the packaging ecosystem.

The federation said it remains open to engaging with customers, government and policymakers to address the situation and work towards a resolution.

To know more about FCBM, click here.

*The data points in the article have been provided by the brand.

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