India’s first modern paper mill was set up in 1832 at Seerampur, West Bengal using the mechanized process for paper making. Since then, the Industry has seen two distinct phases of development. Before liberalization of economy, the sector was operating under a controlled regimen where the market was essentially driven by by local demand and controlled prices as well as production. Even then, the industry, driven by a young nation of a knowledge based growth continued to expand and grow in size and volume to clock a CAGR of almost 8% across almost a decade. After delicencing, the growth rate for some time exhibited a 10% growth. However, at this time, the industry started to face problems due to raw material availability causing the growth rate to slow down. In the mean time, many agro based mill shifted to use of recovered paper for paper making.

In the last three to four years, the Indian paper industry has exhibited a CAGR of about 5% . It is a de-licensed industry where 100% FDI is allowed on the automatic route. In 2019-20, there were more than 850 paper units with an installed capacity of nearly 27.15 million tonne, out of which around 526 mills were in operation with a capacity of approximately 23.64 million tonnes. The estimated production of paper and paper board in the said period was about 20.61 million tonne and consumption stood at 22.06 million tonnes. During 2019-20, a total of 3.54 million tonne of paper, paperboard, and newsprint was imported, In India the per capita consumption of paper is about 16 kg, which is lower than the world average of around 53 kg. It is estimated that increase in consumption by 1 kg per capita would lead to an increase in demand of 1.36 million tonne. The estimated turnover of the industry is INR 70,000 crore (domestic market size of INR 80,000 crore) and its contribution to the exchequer is around INR 5,000 crore. The industry provides direct employment to more than 400,000 persons, and indirectly to around 1.5 million.