India’s Paper Industry faces deepening slowdown as Kraft, W&P markets remain under stress: IRPTA President Naresh Singhal

India’s Paper Industry faces deepening slowdown as Kraft, W&P markets remain under stress: IRPTA President Naresh Singhal

The Pulp and Paper Times | 28 November 2025

India’s paper industry continues to face one of its toughest periods, with demand weakening across almost every region and grade, and prices declining despite production controls, according to Mr. Naresh Singhal, President of the Indian Recycled Paper Traders Association (IRPTA). He said the market has remained stagnant for nearly 45 to 47 days, especially in the packaging and kraft paper segment, which constitutes nearly 67% of total consumption. Kraft paper prices started falling around 10 October, slipping sharply from Rs. 31 per kg to ₹27.5 per kg in a matter of weeks. Waste paper has been relatively stable at Rs. 17.5–18.5, but finished kraft prices have dropped close to waste levels, indicating how severely demand has contracted. Despite mills reducing prices by 2–3%, demand has remained largely absent. Mr. Singhal highlighted that while corrugated box manufacturers are struggling, the notebook and stationery sector is currently suffering the most due to GST-related complications, particularly the blockage of input tax credit, which has led to liquidity issues and slowed production cycles. He said many notebook manufacturers have approached media and government authorities for relief, as they face the strongest impact of the ongoing disruptions.

In the writing and printing paper (W&P) segment, the recent Minimum Import Price (MIP) imposed by the government provided temporary support, pushing board prices up by Rs. 7,000–8,000 per tonne, but the improvement did not last. Prices have again fallen by Rs. 2–3 due to subdued downstream demand, with even major players cutting prices. Nevertheless, some support is visible in W&P due to government textbook orders, NCERT printing, university preparations, and the early cycle of notebook manufacturing. Mr. Singhal noted that while A-grade mills are better placed, smaller C-grade mills are absorbing the bulk of market demand, operating with lower margins and higher pressure.

He added that duplex board remains the only segment where finished goods prices have not fallen, even though bottom-level input prices have softened by about Rs. 2. This makes duplex the comparatively strongest-performing grade in the current market scenario. The slowdown, however, is widespread and not limited to north India. States including Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, Telangana, West Bengal, Jharkhand, Bihar, Punjab, Haryana, Rajasthan, Uttarakhand and Uttar Pradesh are all experiencing similar conditions, with weak demand, delayed payments and reduced commercial activity.

Mr. Singhal emphasized that mills, especially smaller ones, are under serious cash flow pressure due to higher production costs, EMIs and obligations. Many smaller mills are selling their products at ₹0.50 to ₹1 per kg cheaper than large mills simply to stay afloat. He clarified that shutdowns for production control—which were common 7–8 months ago, often lasting five days a month—have now largely stopped because mills naturally have fewer orders. Even after reducing prices, many mills struggle to receive adequate bookings. When asked whether high Diwali-season online sales had helped packaging demand, Mr. Singhal said they did not. Goods sold during Diwali were stocked months earlier, and this year, very little stocking happened in August–September, meaning the festive demand did not translate into fresh packaging demand or new orders for mills.

Addressing concerns about China’s stricter norms on recycled fiber and pulp imports, Singhal explained that China recently introduced a new rule limiting impurities in imported recycled material to not more than 0.5%. Earlier, suppliers sent pulp and recycled fiber with 2–2.5% contamination, which caused pollution when processed. This new policy led to 4,000–5,000 containers being rejected at Chinese ports, raising fears that rejected material might be redirected to India at cheaper rates. However, Singhal said this would not have a major impact because India’s demand is already low, and softwood and hardwood pulp prices themselves have fallen by $30–40 in the last one and a half months, indicating weak global demand. He further explained that China, Taiwan and Indonesia are exporting finished paper and copies at 0% GST as landed products. Whether they are delivered in Kolkata, Mumbai, Delhi or Srinagar, neither the buyer nor the seller pays GST on these imported copies, making compliance-driven domestic markets even more vulnerable.

Despite the sharp decline in prices, GST complications, falling pulp rates, and increasing competition from GST-free imports, Singhal remained cautiously optimistic that some revival may begin by late December or early January, driven mainly by writing and printing demand linked to academic cycles. However, he emphasized that a recovery in kraft and packaging will depend heavily on GST clarity for corrugators, smoother payment cycles and fresh inventory replenishment by buyers. He concluded that the market today is battling weak demand, pricing pressure, operational stress and policy uncertainties, and while early 2026 may bring initial improvement, a meaningful recovery will require stronger economic activity and clearer government interventions.
 

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