Indesign or Illustrator for Packaging Projects

Illustrator.

InDesign should only be used for printed material, booklets, brochures, flyers, etc...

You'll need to mock up a net for your packaging. As well as being the best program for vector based things you can still add imagery, effects and type etc...
 
Illustrator too. Packaging can be quite technical and you get the precision you need in an illustration page - not a dtp package.

That being said, I have created cutter guides in Illustrator and placed them into InDesign before but only for basic stuff like swing tags.
 
ILLUSTRATOR...do NOT use InDesign or Quark or Photoshop!

Why create elements in Illustrator to then import them into another program and then output them again.

Packaging graphic design is what I do and the drawing tools are second to none when you need to tweak cutter guides and tweak the amount of bleed on complicated areas.

If you only have one application then choose the one that will handle the majority of your work, but if you have them all then Illustrator is the most usable with it's use of layers, spot colours and vector tools.
There's nothing like knowing that those two blocks of colour really have 'snapped' together (no gap in between) and that you are accurate to the highest magnification.
 
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