Paper industry between green boom and geopolitical storm

The conversation among industry leaders has thus shifted rapidly from a celebratory outlook on domestic self-reliance to an urgent, dual focus on mitigating costs and ensuring data integrity.

The global pivot away from single-use plastic has been the most powerful tailwind, driving enormous demand for corrugated boxes, protective papers, and speciality grades. This is amplified by the unrelenting surge in eCommerce, ensuring that “every parcel shipped anywhere in the world has strengthened the demand for packaging”. 

This appetite for fibre is driving necessary capacity expansion, exemplified by the successful start of the new PM-3 at Subam Papers, marking a milestone in India's industrial growth. 

Crucially, this growth narrative is tightly linked to energy efficiency, with platforms like the CII National Energy Awards 2026 for the Paper Sector encouraging mills to benchmark and embrace a more sustainable future. Progressive companies are innovating to secure their margins, such as Sharma Enterprises, which targets cost stability by moving to proprietary gas-combustion systems for its honeycomb technology, reserving electricity exclusively for mechanical loads. This technical evolution is part of a broader, necessary industry-wide commitment to “reduce carbon footprint by championing energy efficiency”.

However, acute geopolitical instability is testing this domestic momentum. Tensions in West Asia have created a massive, immediate headwind, critically disrupting the flow of recovered paper imports into India. The consequences are measurable and painful: prices for imported brown grades have surged by 6–7%, with white grades rising by 1–6%. 

This chaos extends deep into logistics, leaving traders with delayed shipments, unpredictable surcharges, and extreme uncertainty as vessels are held across the Strait of Hormuz. The strengthening US dollar, alongside the depreciation of the Indian Rupee to 93.9 levels, further intensifies the financial strain on importers and mills. 

Beyond raw material inflation, the industry faces an existential threat from trade diversion. As instability disrupts West Asia — a critical export destination for Indian paper — export-driven economies like China and Indonesia are poised to redirect their surplus supplies to India. This influx of “low-priced supplies” at potentially “predatory prices” places extreme pressure on domestic manufacturers, who are already struggling to pass on rising production costs to end-users. Production cuts, driven by dependence on locally available and often insufficient raw materials, are becoming a distinct possibility.

Overlaying the economic crisis is a rapid technological transition toward “AI-enabled and digitised” manufacturing, a process championed for analysing machine data and predicting behaviour. This digitalisation delivers clear, measurable benefits, such as real-time efficiency calculations in steam systems that can reduce consumption by over 15%. 

This shift allows operators to move from tedious data collection to focusing on actions, and helps identify and consistently replicate the “golden run”— the best possible operating conditions — despite variables like raw materials and shift manpower. Yet, this trajectory raises a vital, philosophical question: Can AI truly replace the highly skilled operator required at critical points like the Headbox of a Paper Machine? The collective industry wisdom suggests that while technology excels at reducing variation and ensuring reproducibility, the original ‘golden batch’ was achieved using operator skill and experience.

For AI to be fully effective, the industry must first overcome its fundamental challenge: establishing a structured database of reliable, clean primary data. The path forward requires a conscious strategic shift. Manufacturers must move from a volume-driven model to a “cost-minus” framework — generating profit by eliminating internal inefficiencies. By blending domestic efficiency, human knowledge, and data integrity, India can navigate the current storms and cement its promised global position.