Top of the pile is India’s largest paper maker, Ballarpur Industries, which could face costly consequences from punitive US duties on the company’s Asian competitors. There are also varying opinions about the amount of stock that is tied up in the supply chain at present. Ballarpur's cashflow crisis had caused it to run stocks down, and there were reports of it offloading what stock it did have.

As per a Fitch Ratings report, "Ballarpur invested heavily in recent years to modernise its production facilities, and now may not be able to avoid defaulting on its debts. The imposition by the US of duties on Chinese and Indonesian paper in mid-2015 couldn't have come at worse time for Ballarpur, as it prompted companies from those nations to seek more sales in India. India itself is reducing paper import tariffs."

Ballarpur has a Rs 50-crore bond due June 21 and a Rs 60-crore bond due September 29, according to Bloomberg-compiled data. Ballarpur is part of the Avantha Group, an engineering, foods to paper conglomerate, run by multi-millionaire Gautam Thapar.

Also, cheap imports via free trade agreements from Asean countries forced local paper mills to compete. But the sentiment has improved in the last few quarters with a marginal decline in bamboo prices. The trend is likely to continue in the coming quarters.

Data compiled by Indian Paper Manufacturers Association indicates paper imports, including newsprint, at 2.6 million tonnes in 2015-16 worth Rs 12,284 crore, up from 2.35 million tonnes in 2014-15 worth Rs 12,351 crore.

Paper imports have grown annually by 7.9 per cent and 11.4 per cent, respectively, in volume and value terms over the six years. During April-September 2016, imports were 1.4 million tonnes, valued at Rs 6,658 crore.

There are five developments which are transpiring.

1. Paper imports into India have doubled since 2010 and Chinese and Indonesian producers are diverting excess inventory into the nation after the US tariffs, the Indian Paper Manufacturers Association said in a statement to government last November, requesting relief.

2. In a statement issued by the Indian Corrugated Case Manufacturers Association, president Kirit Modi said, "The corrugated box industry in the country with 300 automatic units and more than 12,000 semi-automatic units is facing imminent closure on account of rising kraft paper prices and supply disruptions."

3. A printer who spoke to PrintWeek India on the condition of anonymity said, "I hope the price of paper does not jump up. Although I am one of those printers who does expect my customers to cover all of my costs, even when when costs increase. The sad part of the news is, unlike the Indian Paper Manufacturers Association, the Indian Newspaper Society, the Indian Corrugated Case Manufacturers Association, which is very aggressively vocal with the paper crisis, the All India Federation of Master Printers is doing nothing for us. I think this is going to have a massive impact. Paper merchants won’t be able to cope. Just think of the cashflow required. Short-term mills will have to supply straight into printers. It’s just mega. I really don’t know what’s going to happen."

4. The Mumbai-based print associations, BMPA and MMS have studied the cost structures; and the managing committee has sought an increase in price:

- Products made of Recycled boards and Kraft – 15%

- Products made of FBB/SBS/VAP boards – 10%

- Products made of Maplitho and other papers – 15%

5. Meanwhile the shares of Tamil Nadu Newsprint and Papers dropped as much as 9.2 percent last week after the company stopped production in its Karur unit paper machine due to shortage of water in Tamil Nadu.

The overwhelming view is that any printer that has been relying on one paper supplier is going to have to reassess their order book, soon.

At PrintWeek India, we don’t yet know whether the price hike will result in "an in price slaughter and a chaotic period" as one senior paper executive has predicted, or supply issues in the short-to-medium term.

"Don’t panic" is the message from merchants. "We are working with mills to ensure disruption is kept to a minimum. Balance will be achieved in the medium-to-long term," is the message from the paper dealers group.