Tag: tissue manufacturing

The ongoing crisis in West Asia is likely to have a significant impact on India’s paper industry, posing a dual challenge of rising energy costs and potential disruption in export markets.

Exports of paper and paperboard from India may face a slowdown as West Asia is one of the most important export destinations for Indian paper. In 2024-25, India exported paper & paperboard worth about USD 980 million, of which nearly USD 290 million – close to 30 percent – was shipped to West Asian markets. The key product categories include uncoated writing & printing paper, coated paper and paperboard, and kraft paper.

At the same time, paper industry, which is energy intensive and closely linked to global trade flows, is likely to feel the ripple effects of escalating geopolitical tensions in the region. Higher energy prices and supply disruptions triggered by the crisis will directly impact production costs for Indian paper mills. Energy constitutes a substantial portion of operating expenses for the sector, and any sustained increase in fuel and power costs will place pressure on margins and competitiveness.

The crisis is also expected to lead to higher ocean freight rates due to increased fuel costs, higher insurance premiums and longer shipping routes arising from disruptions in established maritime corridors. This will further affect export competitiveness for Indian manufacturers.

Another major concern for the domestic industry is the likelihood of trade diversion. Export-oriented paper-producing countries such as China and Indonesia, which also rely heavily on West Asian markets, may redirect surplus inventories to India as their exports to the region will also be affected. This could lead to an increase in imports in India at predatory prices, intensifying pressure on domestic manufacturers.

Commenting on the situation, Mr Pawan Agarwal, President, Indian Paper Manufacturers Association (IPMA) said, “West Asia has traditionally been a strong and growing market for Indian paper exports. Any prolonged disruption in the region could adversely impact demand. At the same time, there is a real risk of surplus paper & paperboard from export-driven economies like China and Indonesia being diverted to India in much larger quantities at unfair prices. As it is, India’s paper industry is beleaguered due to rampant dumping of paper in the domestic market at predatory prices by these countries. It is therefore critical to closely monitor import trends and safeguard the interests of domestic manufacturers while ensuring stability in supply chains.”

Regular supplies of LNG / PNG / Propane Gas / LPG to industries in India is being impacted and has started getting curtailed. This is adversely impacting the operations of Paper Mills. Apart from curtailment in direct supplies of LNG / PNG / Propane Gas / LPG to Paper Mills, upstream (suppliers) and downstream (customers) industries are also being deprived of regular supplies of LNG / PNG / Propane Gas / LPG, in turn impacting their production and supplies. Paper Mills are facing difficulties in obtaining chemical supplies used in the manufacturing process like hydrogen peroxide, binders, etc. and downstream industries are likewise finding it difficult to manage their operations.

Almost 30% of India’s total exports of paper & paperboard in value terms are to West Asia. While India’s imports of pulp from West Asia are negligible, around 14% of India’s total imports of waste / recovered paper in value terms are from West Asia.