The Indian paper industry is navigating a transition phase where long-term demand fundamentals remain positive, but pressure from imports, taxation reforms, raw material costs, and regulatory uncertainty continues to strain domestic manufacturers, according to industry experts.
Senior stakeholders across the value chain highlight an industry that is growing in consumption yet struggling with competitiveness and policy clarity.
Despite current challenges, most industry leaders remain optimistic about the medium-term growth trajectory. “Over the next five years, the paper industry is expected to grow at a CAGR of around 7-10%. Considering the Indian scenario, significant headroom is available, and there is no major concern in terms of growth,” said Rajnish Kumar Gera from Trident Papers, highlighting India’s expanding consumption base.
Imports pressuring domestic mills
One of the most consistent concerns raised across discussions was the impact of low-priced imports being dumped in the Indian market. Gera acknowledged that imports are coming in a big way and are hampering margin structures, adding that only mills focusing on efficiency, cost control, and manufacturing excellence would be able to withstand this phase.
Chirag Jain of MLM India pointed out that the issue is not declining demand but excess capacity worldwide. “Consumption has not gone down. Demand is increasing at its own pace, but the problem is overcapacity globally, especially in pulp and paper,” he explained. Jain said countries such as China have added capacity and are dumping paper globally—and India is no exception.
According to him, imports, particularly virgin grades, are unlikely to stop. “India is an importer of paper and pulp. Imports may get delayed due to policy changes, but they cannot stop,” he stated, acknowledging that excessive protection could lead to inflation if domestic mills were to dominate without adequate capacity addition.
Safeguards and policy intervention
The most vocal concerns around trade protection came from Tapish Bhardwaj of Bindal Papers, who said imports were harming the domestic industry. He said India is being used as a dumping ground, eroding the competitiveness of local mills and affecting employment and revenue generation.
As a corrective measure, Bhardwaj advocated for a minimum import price (MIP). “MIP should not be limited only to virgin paperboard. It must also be implemented for writing and printing grades such as uncoated paper,” he said, suggesting that such steps would provide immediate relief and breathing space for Indian manufacturers to invest in technology and capacity upgrades.
Despite these concerns, Bhardwaj maintained that demand growth is closely linked to India’s GDP expansion. “Paper growth is traditionally correlated one-to-one with GDP growth. With the strong government push in education, India remains a very good market,” he added, while pointing out that unchecked imports could prevent domestic mills from capitalizing on this opportunity.
GST reforms and market confusion
Mukesh Gupta of Whale Stationery Products highlighted significant confusion following changes in GST rates. “While reductions in GST clearly mandate passing on benefits to customers, the gazette notification is completely silent on rate increases,” he observed.
Gupta said this lack of clarification has disrupted government procurement and working capital cycles. “On portals such as GeM, systems have not been updated. Invoices at 18% are being rejected for contracts signed earlier at 12%, leading to blocked payments and exhausted credit limits,” he said. According to him, this has directly impacted paper consumption and forced mills to halt expansion plans. “New machine installations have completely stopped. Only replacements and upgrades are happening,” he added.
He pointed out enforcement gaps in quality control norms, especially relating to mandatory ISI certification for photocopier paper. “Imported paper is coming with ISI marks and being sold cheaper, while domestic players face stricter scrutiny,” Gupta said, calling for uniform enforcement.
Consumption vs production
While production capacity remains high, consumption growth has slowed in recent months. Gupta attributed this to multiple factors such as GST confusion, delayed procurement, the government’s shift towards paperless offices, and inconsistent tax classification across paper and stationery products. “Consumption has gone down further in the last three months. Traditional seasonal peaks have flattened,” he noted.
Taken together, the inputs point to an industry that is not in decline but in transition. Demand continues to grow, sustainability-led products are gaining traction, and India remains a consumption-driven market. However, unresolved policy ambiguities, unchecked imports, and structural cost disadvantages are limiting the ability of domestic mills to fully participate in this growth.
“The future is bright for both imports and domestic mills because India is growing. The question is whether domestic manufacturers will get the opportunity to grow alongside that demand,” Jain said.
