Global Economy

The global economic recovery, which began in 2009, continued into 2010 and is expected to continue in the coming years. The developing countries were the main drivers of global economy, wherein they contributed 46 per cent of the total growth in 2010. The growth in developed economies is expected to remain weak, while that in emerging economy - China, India and Brazil - are likely to remain buoyant.

Indian Economic Overview

The Indian Economy has posted a remarkable recovery during the current financial year not only in terms of overall growth but also displayed fundamental strength, which is reflected in the growth of GDP by 8.6% in comparison with the growth rate of 7.4% achieved last year. Indian economy is emerging as the second fastest growing economy in the world after China. The Government and the Planning Commission expect the Indian economy to grow at the rate of 9% in 2011-12, which will simultaneously lead to the growth of paper industry.


Indian Paper Industry

India ranks 15th among the paper producing countries in the world and is highly fragmented with about 700 units spread across the country with installed capacity of 9.2 million tons. The Paper Industry has been granted the status of a priority sector for foreign collaboration and foreign equity participation up to 100% and is entitled to receive automatic approval from Reserve Bank of India.

The Paper Industry is also an important industrial sector having a bearing on the socio economic development of the country. Significant investments are being made in capacity creation and technological advancement especially in the writing & printing segment, which will derive advantages of size, enhance production efficiencies, improve productivity and quality and respond to the challenges of the changing business environment. Companies producing high quality products and pricing at competitive rates alone can sustain and flourish in the domestic and international market.

The per capita consumption in India is about 8.5 kg, which is much lower than World average of 55 kg and Asia average of 45 kg. Given the Indian population over one billion and considering its fast developing economy, there is a great scope that Indian paper industry will grow steeply in a very short span of time. The increasing literacy, increasing consumerism, urbanization, growth in service sector are considered to be the main industry drivers for Indian paper industry and it is estimated that it will grow at a CAGR of 10.7% from Rs. 317 billion in 2009-10 to Rs. 526 billion in by 2014-15. The demand of paper in India is expected to grow 8% over 10 years with India's consumption being placed at 20-25 million tons by 2020.