India: Corrugated Box Prices Rise 20% as Kraft Paper Costs Surge

Corrugated box manufacturers in South India have announced a 20% increase in box prices following a sharp rise in kraft paper and other production costs, according to the South Indian Corrugated Box Manufacturers Association (SICBMA).

The price of kraft paper has reportedly increased from around ₹31,000 per tonne to ₹35,000–₹38,000 per tonne. Prices of 28 BF kraft paper have also risen significantly, from approximately ₹30 per kg to ₹38.50 per kg.

Manufacturers said kraft paper prices were increased three times between August 12 and September 5, putting considerable pressure on production costs. Prices of printing ink, staples and bundling tape, along with labour costs, have also increased.

The association said manufacturers had initially considered a 25% increase in corrugated-box prices, but ultimately decided on a 20% hike.

The industry is also facing tighter credit conditions. Some kraft-paper mills that previously provided 30–60 days of credit are now reportedly seeking payment within seven days, adding to manufacturers' working-capital pressures.

Manufacturers have urged customers, particularly companies in the garment and apparel sectors, to accept pricing based on prevailing raw-material costs and clear outstanding payments within 30 days.

Another major concern is the accumulation of input tax credit under GST. Manufacturers say they pay 18% GST on several inputs while corrugated boxes are sold at a 5% GST rate, creating a significant input-tax-credit imbalance. The association has claimed that refunds have remained pending for several months.

Industry representatives warned that continued increases in raw-material prices and working-capital constraints could put further pressure on corrugated-box manufacturers and businesses that rely heavily on packaging.