Geopolitical Tensions Threaten Indian Paper Industry's Future

The Indian paper industry is grappling with rising energy costs and export disruptions due to West Asia's crisis. Key markets face instability, and raw material supply is strained, posing significant challenges to production. Surplus from China and Indonesia may flood Indian markets, escalating competition.

The Indian paper industry is confronting a dual challenge: mounting energy expenses and potential export market disruptions, stemming from the unrest in West Asia. With nearly USD 290 million worth of paper and paperboard exports reaching this crucial market in 2024-25, any prolonged instability could severely impact the industry, according to the Indian Paper Manufacturers Association (IPMA).

A pivotal concern is the interruption of raw material supplies, especially after February 28th, when the US and Israeli military strikes on Iran sent ripples across trade routes. This has led to curtailed supplies of essential energy sources and manufacturing chemicals like hydrogen peroxide, exacerbating operational hurdles for paper mills.

IPMA President Pawan Agarwal warns that the crisis may result in spillover effects from export-oriented countries like China and Indonesia. These nations may redirect their surplus to India, causing predatory pricing that threatens domestic manufacturers. The ongoing scenario, marked by geopolitical volatility, poses a formidable threat to the competitiveness of India's paper industry.

(With inputs from agencies.)