Solutions-driven environmental non-profit Canopy, in partnership with Finance Earth, has released Paper Thin Comfort: Wood Fibre Risk in a Finite Forest World. The brief highlights escalating risks for India’s wood-dependent industries at a time when paper demand is increasing by nearly one million tonnes annually.
India’s e-commerce packaging and MMCF textile sectors—including rayon and viscose—are becoming increasingly reliant on imported wood pulp and recovered fibre. Tightening global wood supply, climate-related disruptions, and upcoming EU due-diligence requirements are amplifying cost, continuity, and compliance risks for export-oriented manufacturers. With Asia’s paper production having surged 60% between 2000 and 2021, Indian brands face urgent pressure to strengthen fibre security. The brief encourages a pivot to low-risk alternatives such as textile waste and agro-residues like sugarcane bagasse and rice straw—areas where India holds a natural competitive advantage—for more resilient and circular supply chains.
Jointly developed by Canopy and Finance Earth a social enterprise specializing in investment strategies for nature, climate, and communities the brief reveals that rising demand from bioenergy, construction, and packaging continues to outpace sustainable wood supply. Climate stressors, such as worsening wildfires and increased competition for land, are constraining global pulp availability, echoing vulnerabilities in India’s Northeast forest regions and raising the risks of relying heavily on imported pulp and recovered fibre.
Meanwhile, the European Union Deforestation Regulation (EUDR), effective December 2026, will require exporters to certify products as “deforestation-free.” This introduces significant market access and compliance pressures for Indian exporters across textile hubs like Tiruppur and Ludhiana, as well as fast-growing packaging clusters serving e-commerce, food, and FMCG sectors.
Key Risks for Indian Industry
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Rising Demand: Global wood demand, driven by energy transition and e-commerce packaging, is outpacing sustainable forest supply, increasing price volatility for India’s $200+ billion textile and paper ecosystem.
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Supply Constraints: Climate stressors, low waste paper recovery rates, and growing import dependence are heightening vulnerability to raw material shortages.
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Compliance Pressures: New regulations such as EUDR and evolving human rights due diligence norms could add to compliance costs and squeeze margins for Indian exporters.
Nicole Rycroft, Founder and Executive Director of Canopy, said:
“India has a remarkable opportunity. With the right collaboration, waste textiles and agricultural residues like bagasse and straw can become the foundation of low-carbon, circular fibre supply chains—reducing pressure on global forests while strengthening industrial resilience in India. Producers and brands can future-proof sourcing, meet rising global expectations, and unlock new competitiveness through materials that are made to perform, scale, and succeed in India.”
The brief outlines a three-part framework to strengthen India’s fibre resilience and export readiness:
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Scale Alternatives: Accelerate adoption of circular fibres from agricultural residues and recycled textiles to reduce dependence on high-risk forest sources.
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De-Risk Wood: Strengthen sourcing through FSC certification, full traceability, and assessment of ecological and social risks, including impacts on Indigenous and forest-dependent communities.
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Future-Proof: Use scenario planning to anticipate regulatory shifts, climate shocks, and demand surges, guiding investment toward sustainable fibre technologies and domestic fibre scaling.
Canopy will engage Indian brands, manufacturers, investors, policymakers, and innovators to accelerate adoption of these solutions—protecting forests while enhancing India’s position as a competitive, low-risk supplier to global markets.