India’s paper industry needs approximately 1 million tonnes of new capacity annually to meet projected demand of 30 million tonnes by FY2027, highlighting the scale of investment required to keep pace with a rapidly growing economy. In a positive signal from the sector, Nath Industries has announced plans to add a new range of Sublimation Base Paper and Masking Paper to its MG (Machine Glazed) product line — while simultaneously reporting savings of ₹12.24 crore on power and fuel costs through operational efficiency improvements.
The India paper industry capacity requirement is driven by growth across the packaging, writing and printing, tissue, and specialty paper segments. Demand is currently growing at 5–7% annually, while installed capacity has struggled to keep pace due to high capital costs, raw material constraints, and environmental compliance requirements. The industry currently produces approximately 25 million tonnes per year and needs to add capacity every year to bridge the widening demand-supply gap.
Why Does India’s Paper Industry Need 1 Million MT of New Capacity Every Year?
India paper industry capacity expansion is necessary because domestic demand is accelerating across multiple segments simultaneously. The packaging segment is growing at 8.2% annually, driven by e-commerce and the shift away from single-use plastics. Writing and printing paper demand is recovering post-COVID with the reopening of schools and government print procurement. Tissue paper consumption is rising sharply in urban areas, growing at 12–15% annually from a low base. Meanwhile, specialty paper — which includes sublimation base, masking, and release papers — is growing at 10%+ as India expands its textile, automotive, and electronics manufacturing base.
What Is Nath Industries’ New Product Expansion?
Nath Industries is adding Sublimation Base Paper and Masking Paper to its MG range — specialty paper grades that serve the textile printing and automotive painting industries respectively. Sublimation base paper is used in dye-sublimation printing for sportswear, home textiles, and promotional goods — a segment growing rapidly as India’s garment exporters upgrade to digital printing. Masking paper is used in automotive spray painting to protect surfaces during painting, with India’s growing auto sector providing strong domestic demand. The company’s ₹12.24 crore saving on power and fuel costs, achieved through fuel mix optimisation and energy efficiency projects, will fund part of the new product capex.
Market Reaction and Industry Response
The Indian Paper Manufacturers Association (IPMA) has been pushing for government support on two fronts: a Production-Linked Incentive scheme for the paper sector (similar to textiles and food processing) and anti-dumping protection against cheap imports from China and ASEAN countries. A PwC analysis of the sector noted that “the paper industry is likely to face margin pressure over the next 2–3 years; integrated players may build domestic pulp lines as a hedge against price volatility.” Capacity-building investments like Nath Industries’ new product lines are seen as the right strategic response — moving up the value chain into specialty grades with better margins.
What Happens Next?
India’s paper industry is expected to see a wave of capacity announcements in FY2026-27 as anti-dumping duties on Indonesian paperboard take effect and domestic pricing recovers. Pudumjee Paper’s planned 68,000 MT Mahad Specialty Paper Facility will add significant capacity in the specialty grades segment when commissioned in 3–5 years. The government is also evaluating whether to include paper in the next round of PLI scheme sectors. For Nath Industries, the next milestone will be the commercial launch of its sublimation base and masking paper grades, expected in Q3 FY2026-27.
Frequently Asked Questions
How much new capacity does India’s paper industry need each year?
India’s paper industry needs approximately 1 million tonnes of new capacity every year to meet projected total demand of 30 million tonnes by FY2027. Current production is approximately 25 million tonnes per year, and demand is growing at 5–7% annually across packaging, writing and printing, tissue, and specialty paper segments.
What new products is Nath Industries adding to its paper range?
Nath Industries is adding Sublimation Base Paper and Masking Paper to its MG (Machine Glazed) product range. Sublimation base paper is used in dye-sublimation textile printing, while masking paper is used in automotive spray painting. Both are specialty grades with stronger margins than commodity paper categories, reflecting the company’s strategy to move up the value chain.
How did Nath Industries save ₹12.24 crore on power and fuel costs?
Nath Industries achieved ₹12.24 crore in power and fuel cost savings through fuel mix optimisation and energy efficiency projects at its manufacturing facility. These operational improvements reduce the company’s cost base while also lowering its carbon footprint — a dual benefit that supports both profitability and ESG targets as sustainability reporting requirements tighten for Indian manufacturers.
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