New Delhi, March 12 The Indian paper industry is facing various challenges, including rising energy costs and a potential disruption in export markets due to the ongoing crisis in West Asia.
West Asia is one of the most important export destinations. In 2024-25, India exported paper and paperboard worth about USD 980 million, of which nearly USD 290 million (close to 30 per cent) was shipped to the region, according to the paper industry body, IPMA.
The key product categories include uncoated writing and printing paper, coated paper and paperboard, and kraft paper, IPMA said in a statement.
"The 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," it added.
Regular supplies of LNG, PNG, Propane Gas, and LPG to industries in India are being impacted and have started to be curtailed, following the crisis that broke out on February 28, when the US and Israel launched military strikes on Iran.
Paper mills are facing difficulties in obtaining chemical supplies used in the manufacturing process, such as hydrogen peroxide and binders, and downstream industries are also finding it difficult to manage their operations.
IPMA also fears trade diversion by export-oriented paper-producing countries, such as China and Indonesia, which also rely heavily on West Asian markets.
"They '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," it said.
IPMA President Pawan Agarwal said that any prolonged disruption in the West Asia region could adversely impact demand.
"At the same time, there is a real risk of surplus paper and 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," he added.
