India’s Wood Fibre Supply Chains Face Rising Risks, New Canopy–Finance Earth Brief Warns

New Delhi, January 15, 2026: A new issue brief released by Canopy, in partnership with Finance Earth, has highlighted mounting risks for India’s packaging and textile supply chains due to growing pressure on global wood fibre resources. Titled Paper Thin Comfort: Wood Fibre Risk in a Finite Forest World, the brief examines how increasing demand for paper and man-made cellulosic fibres (MMCFs) could affect cost stability, supply continuity and regulatory compliance for Indian manufacturers.

According to the brief, India’s paper demand is rising by nearly one million tonnes every year, while e-commerce packaging and MMCF textile segments—such as rayon and viscose—are becoming increasingly dependent on imported wood pulp and recovered fibre. At the same time, climate-related disruptions, tightening global forest resources and evolving international due-diligence requirements are intensifying risks for export-oriented Indian industries.

The study notes that Asia’s paper production grew by 60 percent between 2000 and 2021, further straining sustainable wood supply. It also flags climate pressures such as wildfires, droughts and land-use competition that are limiting pulp availability and quality, increasing price volatility and exposure for Indian businesses.

Another challenge outlined in the brief is regulatory compliance. New deforestation-free sourcing requirements in key export markets, including the European Union, could raise compliance costs and create market-access risks for Indian textile hubs such as Tiruppur and Ludhiana, as well as fast-growing packaging clusters serving e-commerce, food and FMCG sectors.

Commenting on the findings, Nicole Rycroft, Founder and Executive Director of Canopy, said, “India has a remarkable opportunity right now. With the right partners around the table, waste textiles and agricultural residues like bagasse and straw can become the building blocks of lower-carbon, circular fibre supply chains—reducing pressure on global forests while strengthening industrial resilience in India.”

The brief recommends a three-part approach to strengthen fibre security: scaling alternatives such as agricultural residues and recycled textiles, de-risking wood sourcing through certification and traceability, and future-proofing supply chains through scenario planning to anticipate climate and regulatory shocks.

Canopy and Finance Earth said they will engage with Indian brands, manufacturers, investors and policymakers to accelerate adoption of low-risk, circular fibre solutions, helping protect forests while reinforcing India’s position as a reliable supplier to global markets.