India’s ₹40,000-crore (about $5 billion) packaged drinking water industry is facing cost pressures ahead of the peak summer season, as supply disruptions linked to the Iran conflict drive up prices of plastic bottles, caps and other packaging materials.
Industry representatives say rising crude oil prices have sharply increased the cost of polymers — a key raw material used in manufacturing PET bottles — forcing several small and mid-sized manufacturers to raise prices for distributors. While retail prices have largely remained unchanged so far, companies warn that consumers may soon feel the impact.
According to the Federation of All India Packaged Drinking Water Manufacturers’ Association, nearly 2,000 smaller bottling units have already increased prices to resellers by around ₹1 per bottle, roughly a 5% hike, and further increases of up to 10% are expected in the coming days.
“Supply conditions are unstable and the impact on consumer prices could be visible within a week,” said Apurva Doshi, Secretary General of the association.
The surge in crude oil prices has pushed polymer rates to nearly ₹170 per kg, up about 50%, while the price of bottle caps has more than doubled to around ₹0.45 per piece. Costs of corrugated boxes, labels and adhesive materials have also risen significantly, adding to the overall production burden.
India is one of the world’s fastest-growing bottled water markets, driven by limited access to clean drinking water in many regions. Researchers estimate that nearly 70% of groundwater in the country is contaminated, making packaged water a necessity for millions of consumers.
The market is dominated by major brands such as Bisleri, Kinley, Aquafina, along with offerings from Reliance Industries and the Tata Group, all competing for share in the highly fragmented sector.
The impact is also visible in the premium and mineral water segment, estimated at about $400 million in India. According to industry data, premium water accounted for around 8% of the bottled water market last year, up from just 1% in 2021, reflecting growing demand from affluent consumers.
Premium brand Aava, which sources water from the Aravalli foothills, has increased prices to resellers by about 18%, citing higher packaging and logistics costs.
Industry players say many companies are currently absorbing a large part of the cost increase to avoid losing market share, but the situation may not be sustainable if raw material prices remain elevated.
In the mass-market segment, brands selling low-priced one-litre bottles — typically retailing below ₹20 — are finding it particularly difficult to maintain margins. Some manufacturers have already informed distributors that continued cost escalation makes it impossible to keep prices unchanged.
With demand expected to surge in the coming months, the industry fears that prolonged geopolitical tensions could disrupt supply chains further, putting additional pressure on prices during the peak consumption season.