Paper industry in India is the 15th largest paper industry in the world. It provides employment to nearly 1.5 million people and contributes Rs 25 billion to the government's kitty. The government regards the paper industry as one of the 35 high priority industries of the country.
Paper industry is primarily dependent upon forest-based raw materials.
The first paper mill in India was set up at Sreerampur, West Bengal, in
the year 1812. It was based on grasses and jute as raw material. Large
scale mechanized technology of papermaking was introduced in India in
early 1905. Since then the raw material for the paper industry underwent
a number of changes and over a period of time, besides wood and bamboo,
other non-conventional raw materials have been developed for use in the
papermaking. The Indian pulp and paper industry at present is very well
developed and established. Now, the paper industry is categorized as
forest-based, agro-based and others (waste paper, secondary fibre, bast
fibers and market pulp).
In 1951, there were 17 paper mills, and today there are about 515 units
engaged in the manufacture of paper and paperboards and newsprint in
India. The pulp & paper industries in India have been categorized
into large-scale and small-scale. Those paper industries, which have
capacity above 24,000 tonnes per annum are designated as large-scale
paper industries. India is self-sufficient in manufacture of most
varieties of paper and paperboards. Import is confined only to certain
specialty papers. To meet part of its raw material needs the industry
has to rely on imported wood pulp and waste paper.
Indian paper industry has been de-licensed under the Industries
(Development & Regulation) Act, 1951 with effect from 17th July,
1997. The interested entrepreneurs are now required to file an
Industrial Entrepreneurs' Memorandum (IEM) with the Secretariat for
Industrial Assistance (SIA) for setting up a new paper unit or
substantial expansion of the existing unit in permissible locations.
Foreign Direct Investment (FDI) up to 100% is allowed on automatic route
on all activities except those requiring industrial licenses where prior
governmental approval is required.
Growth of paper industry in India has been constrained due to high cost
of production caused by inadequate availability and high cost of raw
materials, power cost and concentration of mills in one particular area.
Government has taken several policy measures to remove the bottlenecks
of availability of raw materials and infrastructure development. For
example, to overcome short supply of raw materials, duty on pulp and
waste paper and wood logs/chips has been reduced.
Following measures need to be taken to make Indian paper industry more