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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.
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