The Indian paper industry has made steady progress since independence and presently has an installed capacity of 9.18 million tons from mere 0.1 million in 1950. The industry in the last few decades has faced a number of challenges, particularly in areas like, obsolescence of technology, non availability of good quality fibrous raw materials, high cost of basic inputs, environment issues, and competition in global market. The government of India has taken up some initiatives addressing various issues being faced by industries and has intervened to support the industry. Some of the policy interventions by govt. to support paper industry are discussed in the article, so that Indian paper industry's competiveness could substantially be improved.