The Indian Paper Manufacturers Association has asked the Prime Minister for help, in a representation reported on 27 October. It said coal costs have risen more than 50% in two months and that irregular railway rake supply is cutting fuel availability1, 5. The association said some mills may stop production because running them has become commercially unviable1, 5.
IPMA asked for priority allocation of coal and rakes to pulp and paper captive power plants, on par with thermal power stations1, 5. It also sought at least 75% of the coal covered by fuel supply agreements or linkages, supplied regularly1, 5. Energy is about 15% to 20% of the cost of making paper, the association said1.
"Assured coal supplies are essential for the continuity of paper production," said Pawan Agarwal, president of IPMA1. He said domestic producers have limited room to pass on higher fuel costs1.
The coal bill moved on two fronts
Power plant coal stocks thinned through October. Of 176 domestic coal-based plants, 85 held critical stocks on 25 October, meaning less than 25% of the normative requirement2. Coal stocks across these plants fell to 17.67 million tonnes on 25 October from 18 million tonnes on 16 October2. ICRA's Ankit Jain said plant stocks were about six days' use on 10 October, against a normative 19 to 20 days2. Domestic coal output fell 3.2% year on year in the first five months of FY27, while electricity demand rose 23.4% year on year in the first 10 days of October2.
Imported coal also got dearer. Adani Power said its landed imported coal cost rose around 50% year on year in the September quarter, and its fuel cost rose 41.8% to ₹10,229 crore6. The company expects the increase to show up in tariffs at its Gujarat project only after more than six months6.
The two 50% figures should not be read as one number. IPMA measures a two-month move in what mills pay for fuel, while Adani compares the September quarter with a year earlier1, 6.
Why mills cannot simply raise prices
Domestic producers say imports leave them little room to raise prices1. Paper and paperboard imports reached a record 2.05 million tonnes in FY25, with China accounting for 27% of the total4. ASEAN suppliers held over 20% of India's imports and lifted volumes 14% in the first half of FY2025-26, according to IPMA data reported by The Economic Times4.
The basic customs duty on paper and paperboard is 10%, and the industry asked the government in 2024 to raise it to 25%4. New Delhi has also used a minimum import price: a floor of ₹67,220 per metric tonne on virgin multi-layer paper board, which ran until 30 September 20267. The trade remedies body opened a probe into subsidised Chinese and Indonesian paperboard in March, and IPMA sought an anti-dumping duty on Indonesian board in August4.
Two variables could lift that ceiling, and neither is settled. The rupee was at 95.12 to the dollar on 27 October, 7.8% weaker than a year earlier, which raises the rupee cost of imported board8. A duty on Indonesian board would lift landed costs for buyers using imports as a hedge4.
What is already moving downstream
Converters are already paying more. Kraft paper prices rose 22% to 25% by 10 October, and the Western India Corrugated Box Manufacturers Association asked customers to accept immediate price revisions3. In Uttar Pradesh, box units reported a 30% rise in kraft paper prices and said they had raised box prices by around 10%, not enough to cover it3.
The exposure is broad. Packaging is 15% to 25% of a product's total cost for consumer brands, with the share highest in personal and household care9. In paper, growth is in board: packaging paper and paperboard consumption rose 8.2% in 2023-24 on demand from FMCG, textiles, pharma, e-commerce and healthcare4. India has about 900 paper mills, 553 of them operating, with capacity of around 25.6 million metric tonnes10.
A weather warning over the board belt
Some board capacity sits in districts now under a weather warning. ITC's Paperboards and Specialty Papers Division runs a unit at Sarapaka near Bhadrachalam in Telangana's Bhadradri Kothagudem district11. The district is home to Singareni Collieries' headquarters and the Kothagudem thermal power station11. ITC's board business had capacity of over 9.8 lakh tonnes a year as of 2025, and ITC completed its ₹3,498 crore purchase of Century Pulp and Paper this year4, 7.
IMD warned of a storm surge of 1.0 to 1.5 m above tide near Kakinada and Yanam at landfall12. It also forecast isolated extremely heavy rain over coastal Andhra Pradesh and Telangana on Tuesday and Wednesday12. The rain warning covers Telangana, where the ITC unit sits, while the surge warning is for the East Godavari coast12, 11.
What would signal relief
For mills, the test is coal allocation and rakes. IPMA wants captive plants treated like thermal stations and a 75% floor on contracted coal deliveries1. A direction from the Prime Minister's Office, or a visible change in rake supply to industrial captive plants, would be the clearest sign of easing1. The plant stock data cited above show whether power generators are still drawing the coal that industry needs2.
For buyers, watch trade policy and the rupee. A duty on Indonesian or Chinese paperboard would raise the price of the imported board that currently caps domestic quotes4. A weaker rupee does the same, and the currency is 7.8% down against the dollar in a year8.
What to do next
Lock volumes, not just prices. IPMA's warning is about availability, so a fixed rate from a supplier that cannot deliver is not protection1. Ask each board and kraft supplier how much of its coal comes under a fuel supply agreement or linkage, because the association says those deliveries are falling short1. Qualify a second converter now, and keep one imported-board quote live as a benchmark, since duty policy can change the comparison4, 7.
Link escalation to an index rather than reopening prices each month. Kraft paper and box makers are already asking for revisions after a 22% to 25% rise3. Mint reported that Arvind Singhal of The Knowledge Company expects price changes to reach distributors from mid-November, after the Diwali season9.