Indian Paper Industry

The demand for paper is said to be increasingly steadily and it is therefore important that the paper industry in India perform well.

The paper industry has a strategic role to play in society and therefore it is mandatory that the industry fair well in the economy.

The paper industry was delicensed completely in 1997 and therefore entrepreneurs that hope to venture into this industry have to deal with the Secretariat.

In India today, there are about 515 units involved in the paper manufacturing business. India is self-sufficient when it comes to the manufacture of most paper and paperboards. They only import certain types of specialty papers.

However, the country still has to import some raw materials like wood pulp to meet its requirements. A little over 60% of paper production relies on raw material that is non-wood; the other 40% is wood based. The paper industry has however not being performing as well as it could.

This is mainly due to the fact that production costs are high. The high costs of production are due to soaring costs of raw materials, power costs and the fact that many mills are concentrated in one area.

The government has taken policy measures to try and reduce the costs of productions by ensuring infrastructure development and making sure that the necessary raw materials are available. One way that this has been achieved is by reducing the duty that is imposed on wood pulp and waste paper.

Capacity utilization in the paper industry is low standing at about 60%. There are close to 200 mills that are just lying bare; they are either closed or just not being used. This is one of the reasons why importation of paper and paper products has been on the increase.

For the Indian paper industry to be competitive there has to be a reliable and steady source of raw materials, improved infrastructure, reduction of the current costs of production from the current levels, up to date technology employed in the paper manufacturing process and import policies that will ensure a conducive for importing raw materials and technologies.

The per capita consumption of paper in India stands at about 4.00kg which in comparison with other areas in the world is very low. However, this is expected to change in coming years thanks to factors like economic growth and a rise in the literacy rates.