India will host its second international trade fair on pulp and paper technology from Dec. 8-12.

The fair, to be held in New Delhi, will include equipment and machinery and paper-making technology. Some 160 exhibitors, including 60 from overseas, are expected to participate.According to studies by the commercial section of the American Embassy here, India's paper industry provides considerable scope for U.S. exports of wastepaper and pollution control machinery.

India, home for 16 percent of global population, accounts for barely 1 percent of world consumption of paper. Its per capita consumption of 3.1 kg (6.8 lbs.) is very low against 14 kg (31 lbs.) for China and 309 kg (681 lbs.) in the United States.

India has 325 mills with an installed capacity of 3.30 million metric tons a year, of which only 2.52 million tons is effective capacity.

A study by the Industrial Credit & Investment Corporation of India, a leading Indian financial institution, said the projected demand for paper by the year 2000 will be 3.79 million tons, but production is not likely to exceed 2.77 million tons, thus leaving a gap of more than 1 million tons.

Taking a compounded annual growth of 5.5 percent to 7 percent, the demand for paper works out to 4 million to 4.5 million tons by 2002. An additional capacity of about 2.5 million tons is required to be added in the next six to seven years to meet the domestic demand for paper.

Most of the new capacity in the paper industry would be based on wastepaper

because it is cheaper to set up a mill based on wastepaper than a timber-based mill. There is scarcity of raw material like wood and bamboo in the country. The government also has ruled that new paper projects must be based on agro- residue or wastepaper.

Because the quality of domestic wastepaper is extremely poor, India imports large quantities of the product from North America and Europe. Last year, the United States had a 46 percent share of the Indian import market. It was followed by Singapore, Australia and the United Arab Emirates.

The embassy study has estimated that the total import market in 1996 will be worth $450 million, of which the United States is expected to have a share of $207 million. Wastepaper can be imported freely by paying a duty of 10 percent.

There also is considerable scope for U.S. exports of pollution control equipment in the paper and pulp industry. The United States already dominates the import market with a 33 percent share that was worth $5 million in 1994. There is, however, stiff competition from companies of the Netherlands, Germany, Britain and Japan.

According to the embassy study, the import market for pollution control equipment in the paper and pulp industry for 1996 is estimated at $10 million.