West Asia war drives up packaging costs for FMCG firms
FMCG firms weigh price hike to partially offset rising input costs
- Mar 30, 2026,
- Updated Mar 30, 2026 5:22 PM IST
Fast-moving consumer goods (FMCG) companies are facing higher packaging costs due to the ongoing West Asia war.
“Prices of everything that is linked to crude oil in India have gone up except for petrol and diesel. Packing materials, chemicals, and coal prices have gone up by 20–25% from pre-war time,” Shrikant Kanhere, Managing Director and CEO of AWL Agri Business Ltd, told Business Today.
For AWL Agri Business, the maker of Fortune edible oil, prices of edible oil have gone up. “Everything is moving in proportion to crude prices. When crude prices go up, the demand for biodiesel goes up. With more bio-diesel demand, less edible oil is available for human consumption. It’s a dynamic situation that we are going through,” says Kanhere.
Tarun Arora, CEO of FMCG firm Zydus Wellness—the maker of brands like Glucon-D, Complan, Nutralite, Everyuth, and Nycil among others—says that crude-linked packaging materials, such as PET, HDPE, and specialized laminates have seen significant volatility with prices for key resins jumping by nearly 30–50%.
“In the daily essentials industry, particularly, several businesses are navigating a severe strain on margins as packaging can account for as much as 15% of their total manufacturing cost,” says Arora.
“The distortion in supply chain is further compounded by a premium in the secondary trade market due to speculative inventory behavior. This is creating artificial shortages that particularly hit small and mid-sized packaging converters who lack direct procurement channels from primary producers,” he explained.
However, Zydus Wellness is looking diversify sourcing to absorb the price volatility in packaging materials. “While the industry anticipates some pricing pressure if crude remains elevated, our priority is to maintain affordability and product availability. Rather than passing on immediate costs to our consumers, we are doubling down on value-engineering and manufacturing efficiencies. Our scale and forward-looking inventory planning have provided us with a crucial buffer against the current price spikes in the polymer supply chain,” says Arora.
Nikhil Doda, Co-founder and Chief Operating Officer of Lahori Zeera, says the impact of the West Asia crisis is already visible, particularly in sectors like beverages and dairy where packaging forms a significant portion of input costs (around 45–50%).
“Key raw materials such as PET resin have seen a sharp increase of nearly 50% in the last few weeks, pushing packaging costs to near all-time highs. At current levels, this is leading to a 6–7% decline in gross margins for companies like Lahori Zeera,” says Doda.
While the company is implementing “selective and minimal price increases” from April 1, these will only partially offset the rise in input costs, Doda adds.
Fast-moving consumer goods (FMCG) companies are facing higher packaging costs due to the ongoing West Asia war.
“Prices of everything that is linked to crude oil in India have gone up except for petrol and diesel. Packing materials, chemicals, and coal prices have gone up by 20–25% from pre-war time,” Shrikant Kanhere, Managing Director and CEO of AWL Agri Business Ltd, told Business Today.
For AWL Agri Business, the maker of Fortune edible oil, prices of edible oil have gone up. “Everything is moving in proportion to crude prices. When crude prices go up, the demand for biodiesel goes up. With more bio-diesel demand, less edible oil is available for human consumption. It’s a dynamic situation that we are going through,” says Kanhere.
Tarun Arora, CEO of FMCG firm Zydus Wellness—the maker of brands like Glucon-D, Complan, Nutralite, Everyuth, and Nycil among others—says that crude-linked packaging materials, such as PET, HDPE, and specialized laminates have seen significant volatility with prices for key resins jumping by nearly 30–50%.
“In the daily essentials industry, particularly, several businesses are navigating a severe strain on margins as packaging can account for as much as 15% of their total manufacturing cost,” says Arora.
“The distortion in supply chain is further compounded by a premium in the secondary trade market due to speculative inventory behavior. This is creating artificial shortages that particularly hit small and mid-sized packaging converters who lack direct procurement channels from primary producers,” he explained.
However, Zydus Wellness is looking diversify sourcing to absorb the price volatility in packaging materials. “While the industry anticipates some pricing pressure if crude remains elevated, our priority is to maintain affordability and product availability. Rather than passing on immediate costs to our consumers, we are doubling down on value-engineering and manufacturing efficiencies. Our scale and forward-looking inventory planning have provided us with a crucial buffer against the current price spikes in the polymer supply chain,” says Arora.
Nikhil Doda, Co-founder and Chief Operating Officer of Lahori Zeera, says the impact of the West Asia crisis is already visible, particularly in sectors like beverages and dairy where packaging forms a significant portion of input costs (around 45–50%).
“Key raw materials such as PET resin have seen a sharp increase of nearly 50% in the last few weeks, pushing packaging costs to near all-time highs. At current levels, this is leading to a 6–7% decline in gross margins for companies like Lahori Zeera,” says Doda.
While the company is implementing “selective and minimal price increases” from April 1, these will only partially offset the rise in input costs, Doda adds.