The rising global demand for sustainable packaging materials which also has high-performance encouraged noteworthy advancements in nanotechnology, mainly in the development and utilization of nanocomposite materials. Waste builds up because of the traditional plastic-based packaging material’s limited ability to degrade physically, chemically, and biologically. Therefore, the search for alternate materials with eco-friendly abilities is therefore becoming more important. Environmental pollution and packaging waste can be reduced with the use of nanocomposites-based biodegradable packaging materials. The applications of nanomaterials such as nanocomposites (NCSs), nanoparticles (NPs) and NCS films for diagnostics, coating and packaging, nanotechnology has produced creative solutions. In food packaging, physical contamination and microbiological damage are prevented. In food packaging, physical contamination and microbiological damage are prevented. Various applications of nanomaterials are there in packaging industry such as organic nanocomposites, polysaccharide-based nanoparticles, starch nanoparticles, cellulose nanoparticles, chitosan nanoparticles, protein nanoparticles, inorganic nanoparticles, nanoclay, etc. Mechanically, nanocomposite packaging materials show improved tensile strength, flexibility, and impact resistance. Nanoparticles, due to their high surface area and aspect ratio, interact at the molecular level with polymer chains, thereby reinforcing the matrix and improving load transfer. Despite the impressive advancements, the commercial adoption of nanocomposite packaging materials is met with challenges, including issues related to nanoparticle dispersion, agglomeration, interfacial compatibility, and scalability.