Paper stocks witnessed a massive rally on Monday, August 25, after the Indian government announced a minimum import price (MIP) on Virgin Multi-layer Paper Board (VPB), a move aimed at protecting domestic players from cheap imports. Shares of JK Paper surged nearly 18%, leading the pack, while several other paper companies clocked double-digit gains in intraday trade.
Why did paper stocks rise?
The Directorate General of Foreign Trade (DGFT) issued a notification on August 22 mandating a minimum import price of ₹67,220 per metric ton (CIF basis) for VPB under specific HS codes. This rule will stay in effect until March 31, 2026.
VPB is widely used in the packaging of pharmaceuticals, FMCG, electronics, cosmetics, liquor, and publishing products. By setting a floor price, the government aims to strengthen domestic demand, improve realisations, and support margins of Indian manufacturers.
Which stocks jumped?
The announcement triggered strong buying interest across the paper sector:
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JK Paper: up nearly 18%
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Tamil Nadu Newsprint & Papers, Emami Paper Mills, West Coast Paper Mills: up to 17%
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Malu Paper Mills, Andhra Paper, Sangal Papers, Pudumjee Paper Products, Ruchira Papers: up to 13%
Outlook for the paper industry
According to Crisil, writing and printing paper manufacturers’ revenue may recover 4–5% in FY26 after a 7% fall last year. Realisations are expected to rise 2–3%, while operating margins could rebound by 200–250 basis points due to easing hardwood pulp prices and efficiency improvements.
Why it matters globally
The paper industry, tied closely to packaging demand across pharma, FMCG, and publishing, is seen as a key beneficiary of rising consumption. With India’s festive season around the corner and a global push toward sustainable packaging, analysts believe the MIP move will reshape the sector’s near-term trajectory.
