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  • Assistance in every legality associated with the paper manufacturing unit
  • Documentation for all stages of setting up the business
  • Liaising with authorities like CPCB/ SPCB on behalf of the client.
  • Legal assistance throughout the application process

Overview of the Small Pulp and Paper Industry

Paper has a wide variety of uses. It is used for packaging, printing, graphics, signage, design, painting, decorating, writing, and cleaning. As paper consumption in India is likely to reach 30 million tonnes by FY 2026-27 at an annual growth rate of 6-7%, the need for Small Paper and pulp Industry in the future is immense. In the case of India, the increasing demand for paper is primarily driven by the increased use of eco-friendly substitutes like paper bags and envelopes for packaging after the ban on single-use plastic items. Other activities involving paper products like stationery, paper towels, napkins and tissue paper also contribute to this demand. The emphasis on education and literacy also increases the need for paper. While the small Pulp and Paper Industry has made significant capital investments to ramp up production, a few challenges, like the long gestation period and the investments' economic viability, are impacted significantly by the availability and cost of raw materials and other inputs, escalating imports.

Small and medium-sized units dominate the pulp and paper market. Less than half a dozen paper plants account for almost 90% production of newsprint in the country. There is a growing need to modernise the small pulp and paper Industry, improve productivity and build new capacities. The following factors have fuelled the growth of the Small Pulp and Paper Industry in India.

  • Rising income levels and growing per capita expenditure
  • Increasing Urbanisation:
  • Spread of education along with an increase in literacy rate:
  • Rising circulation of print materials like newspapers and magazines:

Steps involved in the Pulp and Paper-making

Preparation of raw Material:  Wood logs are debarked and washed. The debarked wood is then chipped in a chipper if. Chips are then screened for size, cleaned, and temporarily stored for further processing.

Separation of Fibre: This process involves three stages, i.e. cooking, pulp washing and pulp screening. The wood chips are kept in a large pressure cooker (digester) during this process. They are then digested with steam at specific temperatures to separate the fibres and partially dissolve the lignin and other extractives.

Bleaching Process: Bleaching is of two types- Mechanical Pulp Bleaching and Chemical Pulp Bleaching. The fibres are further dignified by solubilising the additional lignin from the cellulose through chlorination and oxidation. This stage can include chlorine dioxide, chlorine gas, sodium hypochlorite, hydrogen peroxide, and oxygen, depending on the quality of paper that needs to be manufactured.

Papermaking Procedure: Water is added to the pulp slurry to make a thin mixture that usually contains less than one per cent fibre. It is then cleaned with cleaners and screened through centrifugal screens. After that, the slurry is fed into the ‘wet end’ of the paper-forming machine. The dilute stock passes through a head box that distributes the fibre slurry uniformly over the width, ultimately forming paper sheets.

Importance of Small Pulp and Paper Industry in India

The primary growth driver in the Indian Small Pulp and Paper Industry is the country's gradually increasing per capita paper consumption. In India, per capita consumption is around 13 kilograms, compared to more than 70-80 kg in some highly industrialised countries. It is estimated that 590 million Indians will live in cities by 2030, which may go up to 820 million by 2050. This increase will lead to higher demand for paper products. The rapidly growing urban population and the increased use of paper by individuals in everyday household activities like writing, packaging and cleaning implies that the demand for paper will increase. According to CPPRI data (2019-20), India has 861 paper mills, of which 526 are operational and have a total installed capacity of 27.15 million tonnes.

India is one of the leading producers and exporters of paper products. India exports A4 copies, wood-free, MG varieties, and large-quality converted products like books, magazines, stationery items, calendars, children's playbooks and comics etc., to countries like the Middle East, Eastern Europe, South-eastern countries and the USA.

Licences and Authorisations required to start a Pulp and Paper Industry in India

The Small Pulp and Paper Industry is one of the most polluting industries, as identified and categorised by Central Pollution Control Board (CPCB). It consumes a significant quantity of water and chemicals and produces industrial effluent that is of polluting nature. CPCB has therefore mandated a list of licences and authorisation that the entrepreneurs must obtain to start their small-scale Pulp and Paper industry in India.

Business Registration: Registering any business provides it with legal status and recognition. Registration for a Small Pulp and Paper Industry can be done through Company Registration with the Registrar of Companies.

Trade licence: Any establishment or business would require a license to operate. Hence it is mandatory to secure a trade license for a particular business. The state government usually issues trade Licenses. Any individual with a trade license can carry out a business's operations without disruptions.

Factory’s Licence: The manufacturing plant must register itself under section 6 of the Factories Act. Documents required for this licence depend upon the checklist issued by the respective state. However, standard documents needed are

  • Duly filled form
  • Application Fee
  • Building plan
  • List of Directors or Partners with their addresses.
  • NOC from other partners or Resolution from Directors under sections 2(n) and 7 of the Factories Act.
  • Copy of the electricity bill as proof of sanctioned load.
  • copy of the rent agreement (as ownership proof)
  • Flow chart of the manufacturing process.
  • List of raw materials used in manufacturing.
  • List of machinery installed.
  • Any other particulars as the Chief Inspector may require.


Pollution NOC: almost all paper manufacturing units in the small Pulp and paper industry fall under the Red Category list in the list maintained by the CPCB. For Instance, units that are based on fresh or waste paper with or without a bleaching process or even agro-based (wheat straw/rice husk) are deemed to be highly polluting and, therefore, must apply to the respective State Pollution Control Board/ Pollution Control Committee under the red category for the Consent NOC, i.e. Consent to Establish and Consent to Operate. The documents needed in this regard are

Documents Required for CTE

  • Duly filled application
  • Signed Undertaking
  • Site Plan or layout plan
  • Detailed Project Report
  • details of different processes/ point sources of effluent discharge and industrial waste that may be generated.
  • Manufacturing process including Details of finished products, list of machinery, the capital cost of land, and building.
  • source of water, required quantity, and water balance
  • Land documents such as rent /lease agreement
  • Industry Registration Documents
  • Consent fee (as applicable)
  • Any other Document specified in the Application Form

Documents required for Consent to operate

  • Duly filled Application form of the concerned SPCB
  • Balanced Sheet Certified by a CA
  • Copy of CTE issued
  • Details of pollution control devices
  • Copy of land-related documents
  • Consent fee (as applicable)
  • analysis report of the trade effluent by a recognised lab
  • Site Plan along with the road/ route map
  • Copy of any environmental clearance (EC)
  • Any other Document specified in the application

Additional Authorisations and Licences required for setting up A Small Pulp and Paper Industry

  • MSME Registration
  • Trademark Registration
  • Fire NOC
  • IEC Registration

Market Overview of the Small Pulp and Paper Industry

India is the 15th biggest paper manufacturer in the world and is emerging as the fastest-growing market when it comes to consumption. India is posting a 10.6% growth in per capita paper consumption since 2021, as the Indian Paper & Pulp Market was valued at 11.48 bn USD in 2021. With the current trend, the industry is expected to reach 31.41 bn USD by 2029, at a CAGR of 13.4%.

Scope of Small Pulp and Paper Industry

As per the Indian Paper Manufacturers Association, the paper Industry holds immense potential for growth in India as the per capita consumption globally is one of the lowest but gradually increasing. The domestic market/paper consumption is over 16 million tons per annum. Over 2 million tons per annum are being imported to other nations. By 2025-26, domestic consumption is projected to surpass 23.50 million tons per annum under the baseline scenario.

How can Enterclimate assist you?

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Our team of licencing experts provides comprehensive assistance in setting up a Small Pulp and Paper Industry. Licencing, authorisation and documentation requirements can be met under the same roof with expert help from our seasoned lawyers, CAs and CS.

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Our team comprises domain experts who can plan, manage and assist you in obtaining licencing and authorisation for your pulp and paper Industry. Moreover, all our packages are tailored to suit the specific needs of our client’s business models.

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We provide dedicated executives to our clients to ensure that they are made aware of changes in the laws and regulations that concern their business. All these benefits are provided at pocket-friendly prices.


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