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. This 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 paper making 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 paper making. In 1951, there were 17 paper mills, and today there are about 515 units engaged in the manufacture of paper and paper boards and newsprint in India. The Indian pulp and paper industry at present is very well developed and established and has been categorized as forest-based, agro-based and others (waste paper, secondary fibre, bast fibers and market pulp) on the basis of raw materials used. The industry has also been categorized into large-scale and small-scale, with respect to scale of operation. 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.
Future of the Indian Paper Industry
The demand for upstream market of paper products, like, tissue paper, tea bags, filter paper, light weight online coated paper, medical grade coated paper, etc., is slowly increasing. These developments are expected to give fillip to the industry. The Indian paper industryneeds the following for being globally more competitive.
Sustained availability of good quality of raw materials (forest based) and bulk import of waste paper to supplement the availability of raw materials.
Adequate modernization of the manufacturing assests.
Improvement of the infrastructure.
Import policy conducive for import of material, equipment, instruments, raw materials & technologies which are bearing of the quality and environment.