India, could be on the threshold of being an outsourcing hub for the packaging sector if the government were to make changes in its policies, and rational tax structure, says Rajiv Dhar, Director of Indian Institute of Packaging (IIP)

He is the current Secretary General of Asian Packaging Federation and the member of Institute of Packaging professionals USA. As the member on the Board of Export Authorities, and the Chairman and council member of BIS Committees he is actively involved in the formation of policies, standards and specifications on packaging.

Dhar is excited about the packaging exhibition to be held next year in October in Mumbai, which is co-sponsored by IIP. In an interview to Prabodh Chandrasekhar of Pharmabiz.com, Dhar spoke on pharmaceutical packaging and issues concerning the packaging industry.

How do you compare the quality of packaging in the country vis-à-vis overseas?

As a result of over protection from the government like reservations to small scale industries and lack of uniform laws, the packaging industry in India is very much lagging behind its western counterparts.

However the downfall is not to the extent of neglect. Components like cartons, cans, laminates, which are Bureau of Indian Standards (BIS) certified are nearing global standards. Same is the case with machinery. Glass bottles and outer cartons are areas that need to be upgraded.

A let down in quality does not necessarily mean we lack in talent. Apart from policy related factors, a poor market can also keep the manufacturer away from manufacturing. The inhaler pump in asthma for example is not manufactured in India for the only reason that the market is small for the product.

Could you point out any remarkable innovation adopted in the pharmaceutical packaging sector recently?

The printing screen technology to generate a hidden screen, a method used by Dr. Reddy's Labs to prevent the counterfeiting of its brand Omez and Bilcare's blister packaging machinery that employs Poly Vinyl Dichloride (PVDC) as substitute to aluminium foils are good examples of innovation.

What is the cost of the packaging in relation to the total value of a product?

It depends from one industry to another. In food sector for example, 40 per cent of the total value on the product comes from packaging. In pharmaceuticals it is about 15 per cent of the overall cost of the product. In sectors like cosmetics, the value of packaging would be more than the actual cost of the product.

Packaging is a capital intensive function. The industry has to also operate taking into consideration environment related problems.

How can India be an outsourcing hub for MNCs in the area of packaging?

Like IT, engineering and pharmaceuticals, India can dream of being an outsourcing hub for the packaging sector. There have been examples like the carton manufacturer in Kolkata supplying to companies in Malaysia.

However, to realize the dream, government will have to make certain amendments in its policies like the removal of reservations from small-scale industries, and making taxation norms uniform throughout the country. The current situation forces a manufacturer to shift his manufacturing base to Pondicherry from Tamil Nadu, because the former is offering more concessions than latter.

Moreover the government currently charges 16 per cent as excise duty, three per cent as octroi and 4-15 per cent as sales tax. This has to be reduced to a uniform level of four per cent throughout the country. This reduction could be then passed on to the consumer. Let India be a big common market rather than markets within a market.

Is the country lacking in quality establishments like the IIP in imparting quality consultancy and education in the packaging arena?

I do not think the country is short of quality packaging institutions. IIP has offices in almost every state of the country. What we need is an increased participation from private establishments in bringing more upgradation and training in packaging.

How relevant would be the IndiaPack 2004 exhibition and conference for the pharmaceutical industry in particular?

The IndiaPack 2004 - the packaging exhibition-cum-conference to be held in October 2004 in Mumbai will be co-sponsored by the Indian Institute of Packaging. It will be showcased in an area of 10,000 sq ft with an expected participation from 500 odd exhibitors. We are targeting exhibitors from the converters, packaging machinery, packaging materials and printing & labeling segment. As none of these segments could be targeted at a particular industry, we cannot pin point the number of exhibitors dedicated to pharma industry. However, we estimate that 15-20 per cent of the exhibition will be directed towards the pharmaceutical industry. There will be special emphasis on safety and anti-counterfeiting technology. We are anticipating thought-provoking talks from pharmaceutical industry officials at the conference.