India’s fast-growing FMCG and food manufacturing industry has created a significant demand for reliable, safe, and attractive food packaging solutions. From dairy products to ready-to-eat meals, spices, snacks, and bakery items—packaging plays a vital role in branding, shelf life, hygiene, and consumer trust. As a result, setting up a food packaging business in India has emerged as a lucrative venture for entrepreneurs who want to tap into the booming processed and packaged food segment. Moreover, with increased government focus on food safety and export potential, the opportunities in this field are expanding across both urban and rural regions.

How to Start a Food Packaging Business in India | Profitable FMCG Setup

A food packaging business involves sourcing or manufacturing packaging materials and supplying them to food producers or packaging food products under your brand. The business can cater to diverse sectors like dairy, bakery, snacks, frozen food, spices, pulses, condiments, and more. With flexible entry levels, one can start small with manual operations and scale up to fully automated packaging plants as demand grows.

See Also – Manufacturing Business Plans

1. Decide Your Packaging Model

There are two major approaches to launching a food packaging business:

A. Contract Packaging (Co-Packing):
You package food products on behalf of other FMCG companies. They supply raw food material, and you supply them with a finished, retail-ready packaged product.

B. Private Label Packaging:
You purchase bulk food items (like dry fruits, snacks, flour, etc.) and package them under your own brand. This model gives you full branding control and better margins.

Moreover, some entrepreneurs also combine both approaches—co-packing during initial months and launching their private labels later.

2. Select the Food Categories to Target

Choose your packaging focus based on local demand, ease of sourcing, and competition.

Popular packaging segments in India:

• Dry snacks (namkeen, chips, khakhra)

• Bakery goods (biscuits, rusks, cookies)

• Pulses, grains, and flours

• Spices and masala powders

• Ready-to-eat meals and frozen foods

• Pickles, chutneys, sauces

• Dairy (curd, paneer, milk packets)

Moreover, eco-conscious packaging for organic or healthy products is gaining popularity in Tier 1 and export markets.

3. Investment and Machinery Requirements

The investment required for a food packaging business depends on scale, automation, and product type.

Small-scale setup (semi-automatic): ?5 – ?10 lakhs
Medium-scale setup (with batch packaging): ?15 – ?30 lakhs
Large-scale plant (fully automatic, multi-line): ?50 lakhs+

Basic machinery includes:

• Weighing and filling machine

• Form Fill Seal (FFS) machine

• Vacuum sealer or nitrogen flushing machine (for chips/snacks)

• Labeling and coding machine

• Batch printing equipment

• Heat sealing machine

Moreover, investing in food-grade stainless steel equipment helps with hygiene compliance and export readiness.

4. Premises and Factory Setup

Your unit should follow FSSAI and BIS safety guidelines:

• Minimum area: 500–1000 sq. ft. for basic setup

• Segregated zones for storage, processing, packaging, and dispatch

• Pest-proof environment

• Dust-free and well-ventilated work area

• Adequate power supply and water source

Moreover, installing CCTV and quality inspection units increases reliability for B2B clients.

5. Raw Materials and Packaging Supplies

Depending on your business model, you’ll need:

• Food-grade packaging materials (LDPE, HDPE, BOPP, PET, glass jars, or paper pouches)

• Bulk food ingredients (if doing private label)

• Labels and stickers (custom-printed with brand info)

• Sealing films, liners, and zip locks (as needed)

• Pallets and cartons for transport

Moreover, source your supplies from reliable manufacturers and get them printed in compliance with FSSAI packaging guidelines.

6. Legal Requirements and Licensing

To start a food packaging business in India, ensure compliance with national food safety and business standards.

Mandatory licenses:

• FSSAI License – Food Safety and Standards Authority of India

• GST Registration – For invoicing and taxation

• Udyam Registration – For MSME classification and subsidies

• Factory License (if applicable) – For units with more than 10 workers

• Pollution Control NOC – For medium/large operations

• Trade License – From local authorities

• BIS Standards (Optional) – For rigid compliance and exports

Moreover, your packaging labels must include net weight, ingredients, batch number, MFG/EXP date, MRP, and FSSAI logo.

7. Branding and Label Design

In the FMCG world, packaging is your first advertisement. Invest in:

• Attractive pouch or box designs

• Logo, colors, and fonts that reflect your brand message

• Clear nutritional info and product benefits

• QR code or website for digital access

• Transparent windows for food visibility (optional)

• Differentiated SKUs – ?10 packs, 100g, 250g, 1kg bulk packs

Moreover, custom-packaged products with smart branding can compete against larger brands even in supermarkets.

8. Distribution and Sales Strategy

Selling your packaged products or services requires strategic channel development:

Offline:

• Supply to retail shops, supermarkets, kirana stores

• Offer packaging services to nearby food producers

• Sell in bulk to wholesalers, institutions, restaurants

Online:

• Sell through Amazon, Flipkart, and Jiomart

• Create a Shopify or WooCommerce website

• Join B2B platforms like IndiaMART, TradeIndia

• Use Google My Business for local SEO

Moreover, food delivery platforms (Swiggy, Zomato) now allow listing of FMCG items through Instamart-type models.

Profit Margins and Business Potential

The food packaging business works on high volume and brand trust. Margins vary by product and market:

• Packaging-only contracts: 10%–25%

• Private label products: 30%–60%

• Specialty food packaging (organic/eco): Up to 70%

Breakeven period: 12–18 months for semi-automatic units
Recurring sales: High, due to FMCG frequency and shelf restocking

Moreover, with over 30 lakh food businesses in India and thousands of new brands launching monthly, demand for reliable packaging partners is constantly rising.

Future Trends in Food Packaging

To stay competitive, your food packaging business should embrace future-ready trends:

• Sustainable Packaging: Bio-degradable pouches, compostable trays

• Smart Packaging: QR-code enabled traceability, freshness indicators

• Minimalist Branding: Clear fonts, matte finish, color coding

• Convenience Packaging: Zip pouches, easy-peel lids, single-serve packs

• Customization at Scale: Low MOQ for startups, seasonal designs

Moreover, investing in digital printing or variable-data printing opens doors to short-run, customized packaging—perfect for small brands.

Government Schemes and Subsidies

The Indian government offers several support programs for food processors and packaging units:

• PMFME Scheme (under MoFPI) – Subsidy for food processing + branding

• MUDRA Loan – For micro-entrepreneurs in food & packaging

• NSIC and SIDBI schemes – For packaging equipment leasing

• PLI Scheme – For large FMCG players using advanced packaging

• Skill India Training – Packaging operator certification

Moreover, registering under Udyam helps you access raw material subsidies, training workshops, and B2B networking platforms.

See Also – Small & Medium Scale Industry

Conclusion

Starting a food packaging business in India is a smart and scalable venture that taps into the ever-expanding FMCG ecosystem. Whether you choose to package your own products or provide contract packaging services, the opportunities are diverse, the demand is strong, and the margins are attractive. Moreover, with increasing consumer awareness around hygiene, shelf life, and brand perception, high-quality packaging is no longer optional—it’s essential. If you can offer efficiency, compliance, and creativity in your packaging operations, your business can grow from local demand to national distribution and even exports.

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