India Paper industry is finding shortage of wood pulp with domestic production is not meeting the increased demand. The industry has resorted to import wood fibre, chips and logs from overseas despite several difficulties. Over the next five years, demand for paper is expected to increase by between 2-12% annually, depending on paper grade. Over the past decade, the domestic pulp industry has steadily increased its usage of pulpwood because of higher pulp production, less usage of bamboo and because several pulp mills switched from recycled fiber to wood fiber. The share of imported wood fiber for the pulp industry accounted for almost ten percent of total consumption of wood fiber in 2014, and this share is expected to increase in the coming years.
Importation of chips is fairly new and Indian pulp mills did not import any wood chips until 2013 when the first shipments of hardwood chips from South Africa, Australia and Thailand arrived. During the first six months of 2015, India imported an estimated 180,000 m3, or about 30% more than in the same period in 2014. So far in 2015, three countries have exported wood chips to India, South Africa, Brazil and Vietnam. South Africa has been the dominant supplier to date, and is likely to continue to be the major supplier for the foreseeable future.