The packaging industry in India has been battling severe problems following the rise in input costs faced by SME corrugated box manufacturing units. A large number of small-scale corrugated box manufacturers are facing the imminent threat of closure as they struggle to meet the hike in prices of essential raw materials. Large-scale closure of SME corrugated box manufacturing units is anticipated to hamper the growth prospects of the domestic packaging sector.Rising input costs posing problemsPrices of kraft paper, which is the key raw material for the corrugated box manufacturing sector, have shot up substantially in the recent past. Paper mills, producing kraft paper, are planning further hike in prices, which is expected to add to the existing woes of SME corrugated box manufacturers and suppliers."Steady increase in the price of kraft paper is leading to huge losses for corrugated box manufacturers. It is also resulting in the erosion of competitiveness of the SME corrugated box makers as they are struggling to keep their prices low in view of the rising overall manufacturing costs," said D Shah, proprietor of Bhagirath Boxes Private Ltd, a small-sized corrugated box maker in Ahmedabad.Besides the sharp hike in the prices of kraft paper, price of other inputs such as starch and galvanized wire have also increased manifold. Furthermore, the collective shutdown of plants by the paper mills is also affecting the SME corrugated box manufacturing units."