With imports, input costs, and pricing pressure weighing on margins, Indian paper companies are tightening operations, improving fibre and chemistry control, and focusing on defined growth segments. Through a series of interactions during Paperex 2025, Paper Mart captures how mills and suppliers are responding across the value chain.
Paperex 2025 arrived at a moment when the Indian paper industry is operating under tighter conditions. Imports and weak price realisation are weighing on margins. At the same time, raw material price volatility, energy cost pressures, and taxation anomalies are increasing operating costs and complexity. Conversations during the show repeatedly veered towards the realities of tighter market conditions. This echoed Paper Mart’s Top Paper Companies 2025 survey in the previous issue, which noted that FY 2024–25 saw stable operational performance but weakened financial outcomes.
Yet, during these conversations with paper manufacturers, technology suppliers, chemical companies, and traders, one point was consistent: the industry is not pulling back. Instead, companies are adjusting operations, inputs, and market focus to current conditions. Rather than chasing indiscriminate capacity growth, companies are now sharpening efficiency and rethinking product mix. They are localising supply chains and investing selectively in segments that promise resilience.
The Industry Under Pressure: A Macro Picture
There is unanimity across the value chain that the current stress facing the Indian paper industry is not a short-term disruption. Imports from China, Indonesia, Vietnam, and other regions have altered pricing dynamics in a way that has fundamentally compressed margins for domestic manufacturers.
As Saurabh Bangur, Chairman and Managing Director, West Coast Paper Mills Ltd., puts it plainly, “Over the last year, imports, GST anomalies and raw material challenges have put severe pressure on margins. With pressure on topline, midline and bottomline, profitability has been impacted.”
Several mill leaders point out that this pressure is compounded by taxation asymmetries and free trade agreements that allow imported paper to enter India at prices that do not reflect local cost structures. GST-related issues, particularly zero-rated imports versus tax reversals for domestic producers, have further tilted the playing field.
At the same time, raw material volatility continues to exert pressure. Whether it is wood for integrated mills or waste paper for recycled-fiber producers, procurement costs have risen sharply over the past two years. Even where availability is manageable, price stability is not.
According to N. Gopalaratnam, Chairman, Seshasayee Paper and Boards Ltd., the challenge is clearly dual in nature, “Paper industry in India has been battling dual challenges: firstly, significant drop in sales realisation for domestically manufactured paper due to cheaper duty-free imports from China, Indonesia and other SAARC and SE Asian economies. Secondly, significant increase in the cost of wood which is key raw material for all integrated pulp and paper manufacturers.”
At the operating-mill level, the impact of these forces is being felt directly in pricing discipline and market behaviour. Even where demand exists, price recovery has remained elusive due to the steady inflow of imported material.
As Ruchica, Director, Ruchira Papers Limited candidly observed, “There has been a significant amount of ‘dumping’ in the market… This trend has made paper pricing extremely challenging for Indian paper manufacturers, who have been unable to realize their fair share due to the large volumes of imported paper in the country.”
Beyond India’s borders, global supply-demand imbalances are amplifying the situation. Excess capacity created during the COVID-era expansion has not been fully absorbed, intensifying competition in commodity grades and pushing exporters to chase volume aggressively in price-sensitive markets like India.
From a trader’s perspective, Saksham Jain, Executive Director, Indo Global Commercials, explains the underlying driver, “The biggest challenge we are facing is the oversupply and excessive capacity in the global market for most commodity grades. This is creating unhealthy competition among suppliers.”
Together, these forces have made it clear that the current pressure on the Indian paper industry is structural rather than cyclical. Policy support may offer partial relief, but industry leaders increasingly acknowledge that long-term resilience will depend less on external correction and more on internal recalibration through efficiency and disciplined growth.
Watch: Top Paper Companies 2023
How Mills Are Responding: New Manufacturing Discipline
However, despite these constraints, the prevailing sentiment across the industry is not defensive. Many industry leaders openly acknowledge that policy intervention alone will not restore balance. The response, instead, is inward-looking: improve cost competitiveness and enhance operational efficiency. Reducing reliance on commodity grades will also be important.
This change in mindset is most visible at the manufacturing level, where mills are choosing discipline over panic, and optimisation over indiscriminate growth. Rather than chasing volume in a depressed pricing environment, they are tightening processes and extracting more value from existing assets.
At the large integrated end of the industry, the emphasis is firmly on operational stability and margin protection. As Saurabh Bangur explains, “Given the current industry scenario, we are focusing on stabilising and improving operational efficiency. Our plant has been running at 98 to 100 percent capacity for many years.”
This focus on efficiency is not limited to integrated writing and printing producers. In packaging and board segments as well, scale is now being backed by a sharper understanding of operational discipline. According to R. N. Agarwal, Chairman and Managing Director, NR Agarwal Industries Ltd., “Efficiency will play a critical role going forward. With increasing competition, operational efficiency has become a necessity without which the margins will simply not sustain.”
Having already demonstrated the ability to operate at very large machine scales, the industry, he suggests, has crossed a manufacturing threshold. As Agarwal notes, “Earlier, producing 1,000 TPD paper was considered extremely challenging, not just from a manufacturing standpoint, but also in terms of finishing, logistics, and servicing. However, having successfully achieved and managed this scale, we are now confident that the industry must therefore embrace larger capacities and bold ambitions.”
However, these ambitions are increasingly being executed through technology-led optimisation rather than sheer capacity addition through new capital investments. At Kuantum Papers, this philosophy is being translated into systematic upgrades across machines, supported by automation, advanced process control, and predictive analytics. As Jagdeep Hira, CEO (Operations), Kuantum Papers Ltd., explains, “Efficiency is a continual improvement process that every manufacturer must commit to in order to excel. With higher productivity, efficiencies naturally improve, and this pursuit goes beyond mere productivity expansion; it is equally about elevating quality.”
Here, automation is not about replacing manpower, but about reducing variability and stabilising outputs in an increasingly unforgiving market environment. As Hira succinctly puts it, “When your inputs are controlled, your outputs remain consistent.”
This renewed emphasis on manufacturing discipline is also affecting capital expenditure decisions across the sector. Rather than pursuing greenfield projects with long gestation periods, mills are prioritising rebuilds, retrofits, and targeted upgrades that offer faster payback and lower execution risk.
From a technology supplier’s vantage point, this shift is unmistakable. As Johannes Kaiser, Director – Capital Sales, Bellmer, observes, “In India, projects are largely focused on rebuilds, especially for writing and printing paper machines.”
Mid-sized manufacturers are following a similar path. Ruchira Papers, for instance, has completed a significant modernisation programme aimed at improving press dryness, machine speed, and product quality without chasing incremental volumes in a weak pricing environment. As Ruchica Garg Kumar states, “We have been able to address this challenge by focusing on delivering high-quality products. This helps us to perform well and maintain a strong position in the market.”
Even among recycled-board producers, the manufacturing response is increasingly about differentiation through process capability rather than scale alone. As Venkataramanan Ramaswamy of Sripathi Paper and Boards notes, “It’s very important for players to innovate and differentiate themselves. So we have identified a few things that we can do differently and transition into the larger movement of sustainable packaging.”
Taken together, these perspectives underline a clear departure from the earlier industry behaviour. Instead of expanding capacity ahead of demand, mills are ensuring that existing assets o`perate closer to their optimal potential. Process optimisation through automation and rebuilds is no longer optional upgrades; they are strategic tools being deployed to withstand prolonged market pressure. In that sense, the response underway is neither loud nor dramatic, but it is deliberate, and it is structural.
Control Over Material Consistency: Support From Chemistry Enablers
If manufacturing discipline is one pillar of the industry’s recalibration, materials control is the other, and in many ways, the more complex one. Across Paperex 2025 interviews, it became evident that the material challenge facing the Indian paper industry today is not merely about availability, but about consistency. Whether mills are dependent on wood, agro-residue, or recycled fiber, variability in furnish quality is now a structural issue, amplified by ZLD norms and tightening environmental standards. Rising expectations from end-users also add up to this.
As fiber quality deteriorates, particularly in recycled grades, mills are being forced to rethink how chemistry and process technologies are deployed on the machine floor. Odour, microbial load, starch loss, and unstable wet-end chemistry are no longer isolated technical irritants; they directly affect saleability and customer confidence.
Odour control has emerged as one of the most visible symptoms of this shift. In recycled paper mills operating under ZLD regimes, odour is no longer a secondary concern but a decisive factor in customer acceptance. As Arvind Kumar Sharma, Director, Anmol Polymers points out, “Odour has emerged as a critical challenge for recycled paper mills in India, particularly due to the increasing adoption of ZLD systems.”
The implication is significant. Odour control cannot be addressed through standalone additives alone; it requires a coordinated approach that accounts for water circuits, microbial behaviour, and downstream interactions. This is why chemical suppliers are increasingly positioning themselves as system partners rather than product vendors, helping mills stabilise processes rather than merely treating symptoms.
A similar shift is visible in how starch and retention chemistry are being approached. Balaji Chem Solutions has focused attention on what it sees as a chronic inefficiency in papermaking, losing unretained starch into process water, where it becomes a driver of microbial growth and instability. To address this, the company has moved toward in-mill chemical manufacturing. As Navneet Singh Kaushal, Director, Balaji Chem Solutions states, “We are installing in-house chemical production facilities at the premises of paper manufacturers.”
The logic is straightforward: fresher chemistry and tighter formulation control. Reduced dependency on external supply chains is also part of this logic. In high-recycle systems, such control translates directly into better runnability and lower biological load.
Bluecraft Agro reflects the same thinking from a starch-specialist perspective. Rather than offering standardised products, its approach is built around “customised starch solutions” to suit individual machine speeds, furnish mixes, and end-use requirements, recognising that variability at the input stage increasingly determines outcomes on the reel.
For technology suppliers, the materials challenge is inseparable from fibre recovery and loss prevention. Kadant’s focus on stock preparation and reject handling, along with fibre recovery systems, speaks to a broader industry imperative: extracting maximum usable value from every tonne of raw material. As Amit Deep Singh, Director – Sales and Marketing, Kadant India Pvt. Ltd., explains, “Kadant leverages its wide portfolio by delivering targeted technologies that significantly improve efficiency and sustainability within key stages of the papermaking process.”
Such interventions are no longer viewed as optional upgrades. In an environment of volatile wastepaper and pulp prices, reducing fibre loss upstream has become one of the most effective ways to protect margins downstream.
Energy and water, too, have quietly moved into the materials conversation: not as sustainability narratives, but as process inputs that must be stabilised. Several mills are now deploying energy- and water-related technologies specifically to insulate production from volatility.
At Bindals Papers, for instance, investments in waste-to-energy and power circularity are being used to stabilise energy availability and cost, rather than framed as standalone green initiatives. Similarly, at Sripathi Paper and Boards, technologies such as maglev vacuum pumps and advanced water treatment are being adopted to reduce energy consumption and improve process reliability in recycled-board manufacturing.
These mill-level examples underscore a larger point: enabling technologies only matter when they are absorbed into daily operations. Chemicals, starch, fibre recovery systems, and energy technologies are no longer peripheral inputs; they now sit at the core of operational control.
Robust Markets: Where Growth Is Coming From
If the macro environment explains why the industry is under pressure, and control over consistency explains how mills are responding internally, this market lens reveals where growth is still credible, and where it is not.
Across interviews at Paperex 2025, there was broad agreement on one point, not all paper markets are equal anymore. While overall demand continues to grow in India, it is increasingly segmented between price-sensitive commodity grades and application-driven value-added products. This divergence is shaping investment decisions across the industry.
Packaging: Packaging remains the single largest demand driver for the Indian paper industry, supported by e-commerce, FMCG consumption, organised retail, and gradual substitution away from plastic. However, the segment is no longer viewed as an automatic margin generator.
Several producers acknowledged that while volumes have grown, pricing has remained under pressure due to capacity additions, both domestic and overseas. The post–single-use plastic ban expansion wave has created pockets of overcapacity, particularly in certain board and cupstock grades.
As Saurabh Bangur, observed while discussing board markets, “Cup stock is currently going through a very challenging phase. Following the plastic ban announced a couple of years ago, many players expanded capacity, but that growth did not materialise as expected.”
This has prompted a more nuanced approach to packaging, with mills increasingly focusing on barrier properties, food-contact compliance, odour control, and application-specific grades rather than undifferentiated kraft or board volumes.
Specialty Papers: Specialty papers have emerged as one of the few segments where pricing power can still be defended, provided technical credibility exists. Décor papers, coated grades, OGR, C1S/C2S, and barrier papers were repeatedly cited as focus areas, but with an important caveat: entry barriers are high.
As one producer noted, specialty papers are capital-intensive not only in machinery, but also in process know-how and consistency. This is why capacity additions in this segment are cautious and often preceded by pilot trials and customer validation.
At Sillverton Industries, the strategy is explicitly tied to occupying niches with limited domestic supply. As Akshay Jain, Managing Director, Sillverton Industries, explains, “We are developing products such as C1S, C2S, CCK (Clay Coated Kraft), SCK (Super Calendered Kraft), and OGR (Oil & Grease Resistant) paper grades that are produced by very few manufacturers and have limited production levels.”
Here, the market opportunity is not volume-led expansion, but import substitution and application-driven demand, particularly in food packaging and high-end converting.
Tissue Paper: Among all segments discussed at Paperex 2025, tissue paper stood out as the most consistently cited growth opportunity. Hygiene awareness, urbanisation, hospitality recovery, and extremely low per-capita consumption continue to underpin demand growth.
Importantly, several players emphasised that the Indian tissue market is still evolving, especially for virgin tissue, creating room for both domestic absorption and exports. This dual-market approach is shaping investment strategies.
As Saurabh Bangur noted while discussing the group’s entry into tissue through Andhra Paper, “This will be virgin tissue paper, and the Indian market for virgin tissue is still not fully mature. We do not expect to sell the entire quantity domestically.”
Specialist producers echoed this view, highlighting that differentiation in GSM, softness, and runnability, rather than sheer scale, will determine success in this segment.
Exports: Exports remain an important balancing lever, particularly for mills operating at high utilisation levels. However, global oversupply, freight volatility, and aggressive pricing from Southeast Asian producers have made export markets more competitive than in previous cycles.
Traders pointed out that while commodity grades face intense competition, specialty and application-specific papers still find acceptance internationally, though with longer qualification cycles and stricter consistency requirements. This reality is prompting mills to treat exports not as opportunistic volume outlets, but as strategic extensions of differentiated product portfolios.
Also Read: West Coast Paper Mills on Strategy in a Difficult Phase
What Emerges Here is a Clear Pattern
Growth in the Indian paper industry is no longer broad-based, but is conditional. It is selective and segmented too. Packaging offers scale but demands differentiation. Specialty papers offer margins but require discipline. Tissue offers growth but demands quality. Exports offer balance but penalise inconsistency.
As the senior industry leader N. Gopalaratnam summarised the broader outlook, “Domestic demand is projected to grow steadily, especially in packaging, tissue, and specialty grades.” In this environment, success is less about being present in every segment, and more about choosing the right markets and serving them well.
Taken together, the insights from Paperex 2025 point to an industry focused on operating discipline rather than expansion for its own sake. Under tighter market conditions, Indian paper companies are prioritising efficiency, material control, and selective market participation: choices that will shape performance and resilience in the period ahead.
