India’s paper and pulp industry has welcomed recent amendment allowing plantations on forest land
Manufacturers say chronic wood shortages and rising imports have left domestic mills under strain
The changes remove long-standing environmental levies for certain plantation activities
Industry leaders argue the move could revive underutilised capacity and align with greening targets
India’s paper and pulp industry has been lobbying since 1970s to secure regulatory changes allowing plantations on forest land, a move that could provide relief to the struggling industry by reducing import dependence and reviving underutilised mills.
On January 6, 2026, the Union Ministry of Environment, Forests and Climate Change (MoEF&CC) notified an amendment to the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980 — earlier known as the Forest Conservation Act, 1980 — granting direct access to forest land. Under the revised rules, private entities can now undertake commercial plantations in forest areas without paying long-standing environmental levies such as Net Present Value (NPV) and Compensatory Afforestation (CA).
NPV is one-time charge levied on users diverting forestland, based on a scientific calculation of the value of ecosystem goods and services such as clean air, water and biodiversity.
The Centre’s consolidated guidelines, originally notified on November 29, 2023, provided the terms and conditions for assignment of forestland on lease for raising commercial plantations of low rotations. The guidelines stated that plantation of medicinal plants in the forestland shall be considered non-forest activities and require prior approval of the Union government.
The latest amendment, however, states that assisted natural regeneration, afforestation and plantations carried out by government or non-government entities will be treated as “forestry activities”.
Rohit Pandit, secretary general of the Indian Paper Manufacturers Association (IPMA), told Down To Earth (DTE) that earlier guidelines issued in 2023 were primarily designed for mining projects and forest land leased for extraction purposes, where conditions such as NPV payments and CA applied.
“We had consultations with MoEF&CC and conveyed that these changes were unviable for the pulp and paper industry,” he said. “Mining industry extracts minerals and impacts the ecology so CA and NPV is required. Our proposal is to increase the green cover by short-rotation plantations on a large scale, and NPV and CA should not be applicable to industries contributing to the green cover.”
He added that the revised provision gives new hope to revive the sinking paper industry, and now it is up to the state governments to adopt and implement.
There have been long-standing concerns over a shortage of domestic wood availability, rising demand for paper, and growing dependence on imports, according to industry representatives. Paper manufacturers have persistently demanded addressing the widening gap between wood supply and consumption, which they argued has constrained domestic production and raised costs.
According to Indian Paper Manufacturers Association’s (IPMA) annual report for 2024-25, domestic wood availability is estimated at around nine million tonnes per annum, against a current demand of about 11 million tonnes. The amendment could help bridge this gap while also contributing to national greening targets, the report said.
Manufacturers also link their case to India’s climate commitments, arguing that commercial plantations can align with broader restoration goals. Under its Nationally Determined Contributions (NDC), India has committed to bringing an additional 25-30 million hectares of degraded land under forest and tree cover by 2030, creating an additional carbon sink of 2.5-3 billion tonnes of carbon dioxide equivalent.
In 2019, the central government also pledged to restore 26 million hectares of degraded land by 2030 separately as part of the 2011 Bonn Challenge by Germany and the International Union for Conservation of Nature.
The revised provisions have offered “new hope” for the industry by improving access to raw materials while contributing to land restoration, government revenue and rural livelihoods, Pandit said.
Despite being the world’s third-largest paper producer, India continues to rely heavily on imports to meet domestic demand. Paper demand in India is growing at 6-7 per cent annually, IPMA’s report noted, with per capita consumption at around 16 kilogrammes (kg), significantly lower than the global average of 57 kg.
India produces an estimated 23 million tonnes of paper a year but remains fibre-deficient fibre-deficient, facing chronic shortages of raw materials.
Recovered paper or recycled fibre accounts for nearly 76 per cent of raw material use, while wood or bamboo contributes around 20 per cent, with the remainder supplied by agricultural residues. More than 90 per cent of wood demand is met through industry-driven agroforestry or farm forestry, with the rest sourced from government and other channels, the report said.
Of roughly 900 pulp and paper mills in the country, just over 550 are currently operational, the 2023-24 annual report of the Union Ministry of Commerce and Industry stated. Domestic paper production stood at nearly 21 million metric tonnes in 2021-22, while total demand for paper, paperboard and newsprint reached around 24 million tonnes in 2022-23.
To meet this shortfall, imports have risen sharply. In value terms, imports grew at a compound annual growth rate of 11 per cent from 2010-11, with volume growth at 10.37 per cent. Imports from Association of Southeast Asian Nations (ASEAN) countries have increased particularly rapidly. Between 2010-11 and 2023-24, they grew at a compound annual growth rate of 25.74 per cent in value and 24.82 per cent in volume, the report said. “Imports are growing at a very high rate as compared to the increase in domestic production rate with underutilisation of domestic installed capacity,” it stated.
Imports from ASEAN countries, China and Indonesia had doubled in volume over the past three years, said Pavan Khaitan, vice-president of IPMA. He said price pressures could only be addressed if locally sourced wood became more readily available.
However, the industry’s push for additional land comes amid growing global concern over pressure on forests and competing land use. A recent report, Paper Thin Comfort: Wood Fibre Risk in a Finite Forest World, published by environmental non-profit Canopy in partnership with financial consultancy Finance Earth, highlighted mounting stress on forest resources worldwide.
It noted that global paper demand is increasing by nearly one million tonnes annually, driven largely by growth in paper-based packaging linked to e-commerce. It also underlined the rise in global consumption of virgin wood pulp for paper and textile production, which currently accounts for around 20 per cent of global wood use and is likely to continue increasing.
Around 60 per cent of global paper production is now used for packaging and wrapping, amounting to 259 million tonnes in 2023 — up 7 per cent from 2019. Production has increased by more than 60 per cent since 2000 across Asia, Europe and North America
While demand continues to rise, supply is under stress from climate change, land constraints and competing land uses, the report underlines. Permanent agriculture alone is estimated to have driven the loss of six million hectares of tree cover annually between 2015 and 2024.
Khaitan said land availability remained a critical constraint for the paper industry, underpinning calls for access to additional land.
IPMA estimates that around 500,000 farmers are engaged in growing eucalyptus, subabul (Leucaena leucocephala), coastal she-oak (Casuarina equisetifolia), acacia, poplar (Populus), chinaberry tree (Melia azedarach), mango (Mangifera indica) and silver oak (Grevillea robusta) — species largely used in the paper industry. Around 1.2 million hectares is used for plantations across the country.
Jay Deepak Shah, chief executive and managing partner at Jay Wood Industry, said the amendment comes at a time when wood-dependent sectors face increasing pressure to balance demand with complex supply challenges. “For sectors such as industrial packaging and logistics, consistent access to timber has been a long-standing challenge, often limiting long-term planning and operational efficiency,” he told DTE.
According to the India State of Forest Report 2023, around 92,989 square kilometres of land has been identified as suitable for potential upgradation, with an estimated carbon sequestration potential of 636.5 million tonnes.
This article is the first in a three-part series examining the recent amendment to India's nodal forest conservation law and its implications for the country's forests and paper industry. A detailed analysis of the amendment appears in Down To Earth's 1-15 February 2026 edition.