FDI Inflows to Paper and Pulp

Abstract:

100% FDI is allowed in the Paper and Pulp industry in India. There is a high scope of FDI in this sector. According to the estimates of Central Paper and Pulp Research Institute of India, FDI in this sector will increase considerably in the coming years.

The FDI inflows into the Indian Paper and Pulp industry has shown rise in the recent years. The scope of FDI inflow in the Indian Paper and Pulp industry of India is immense. 100% Foreign Direct Investment (FDI) is allowed in the Indian Paper and Pulp industry under the automatic route.

The scope of FDI in the Paper and Pulp industry of India can be summarized as follows:

• The present newsprint demand is 1.3 million tons per year
• Shortage of high quality newsprint
• Low production capacity of high quality newsprint in India
• At this production level the dependency on imported variety is to stay till 2020
• Low labor cost
• Per capita of consumption rate to increase to 10 Kg by the end of 2010
• Huge scope for waste paper recovery and recycling industry
• Huge scope for increment in the plantation area
• Current deficiency stands at 2 million tons a year

FDI in the Indian Paper and Pulp industry and some of the latest developments associated with it are as follows:

As per the Central Paper and Pulp Research Institute of India (CPPRI), the country will soon witness huge inflow of foreign direct investment from a multinational Finland based company. The CPPRI has been vested with the sole responsibility of carrying out the feasibility report on this greenfield project, which was finally accepted by the said Finland based company. The western Indian states of Maharashtra or Gujarat will house the facility and the facility would be of 4 lakh ton per annum capacity. The FDI in Pulp and Paper industry is going to witness a huge inflow of capital to the tune of Rs 1000 crores as a result of establishment of this facility.

Last Updated on 4/23/2011