Why are Kraft paper prices rising in India? Corrugated box makers face 25% cost surge

Kraft paper prices in India have climbed by 22% to 25% in the past three months, putting fresh financial pressure on manufacturers of corrugated boxes. The increase, which ranges from Rs 7 to Rs 10 per kg depending on the paper grade, has raised production costs for an industry dominated by micro, small and medium enterprises (MSMEs).

The Western India Corrugated Box Manufacturers Association (WICMA) has called for an immediate price revision for corrugated boxes and greater stability in Kraft paper prices. The association represents an industry that includes around 4,000 corrugating units in western India and approximately 25,000 units across the country.

Kraft paper is the primary raw material used to manufacture corrugated boxes, which are widely used to package and transport products across sectors such as food, pharmaceuticals, fast-moving consumer goods (FMCG) and e-commerce.


Why are Kraft paper prices rising in India?

The recent increase in Kraft paper prices reflects a combination of higher raw material costs, international market movements, energy expenses and changes in domestic supply.

According to WICMA, several factors are contributing to the rise.

1. Higher waste paper and recycled fibre costs

Waste paper and recycled fibre are important inputs in Kraft paper manufacturing. An increase in the cost of these materials, whether sourced from India or overseas, raises the cost of producing paper. When mills pay more for recycled fibre, the additional expense can put pressure on the prices charged to corrugated box manufacturers.

2. Rising international paper prices

Movements in global paper prices can influence the domestic market. Higher international prices may affect procurement costs and the pricing decisions of Indian manufacturers. This adds another layer of pressure on corrugating units that are already dealing with higher input expenses.

3. Indian mills allocating capacity to exports

WICMA has also cited Indian paper mills booking production capacity for export orders. When mills allocate capacity to overseas buyers, the amount of paper available for domestic customers can be affected. The resulting supply conditions may influence prices in the Indian market.

4. Higher energy, fuel and chemical costs

Paper manufacturing requires energy and other industrial inputs. Rising expenses related to fuel, coal and chemicals add to the overall cost of production.

These increases can feed into Kraft paper prices, making it more expensive for corrugated box manufacturers to source their main raw material.

5. Transportation and logistics expenses

The cost of moving raw materials and finished paper also affects the industry's overall cost structure. Higher transportation and logistics expenses can increase procurement costs for manufacturers, adding to the pressure created by other inputs.

6. Domestic supply and demand conditions

The balance between paper availability and demand within India is another factor affecting prices. Changes in raw material availability, procurement costs and mill capacity allocation can influence the prices paid by buyers. WICMA has identified these domestic market conditions, along with international developments, as contributors to the recent escalation.

Corrugated box manufacturers struggle with rising costs

The sharp rise in Kraft paper prices has created a difficult situation for corrugated box manufacturers, many of which operate on narrow profit margins. WICMA President Shlok Kedia said the industry was struggling to absorb a 22% to 25% increase in raw material prices over such a short period. According to him, manufacturers typically work with thin margins.

The association said customers had supported an earlier exceptional price increase during February and March 2026. However, another substantial increase within a few months has added to the industry's concerns.

Kedia described the latest escalation as a serious mismatch between production costs and the prices manufacturers can charge their customers. He said the issue was no longer about seeking higher margins but about the ability of businesses to continue operating when selling prices do not reflect their production costs.

WICMA seeks price revision from customers

The association has appealed to customers across the FMCG, food, pharmaceutical and e-commerce sectors to support an immediate and proportionate increase in corrugated box prices. For box manufacturers, a price revision would help address the gap between higher Kraft paper costs and the revenue earned from selling finished packaging products.