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As we know that paper is more than an industrial and commercial commodity. This production of the handmade paper can be categorized into an cost effective, eco- friendly, profitable, energy and resource saving technique. This process of making paper involves the operations of pulping, web formation, sheet pressing and the moisture removal which finally undergoes finishing with coloring agents and calendaring. The chemicals in this process are very few namely Sodium Hydroxide, Starch, Rosin alum. So, it causes very little amounts of pollution. Thus it leads us to an eco-friendly society. This was the most required thing for us now. As these handmade paper industries are the small scale industries it includes less investment with a good amounts of profits. Some of the problems faced by the large scale paper mills are overcome by methods like: Raw materials- Here in these processes of making paper the raw materials used are mostly the textile waste, Gunnies, Banana stem which are abundantly available to us; Chemical requirement- very few chemicals are used in the small scale handmade paper mills as already discussed above. So, high capital investment to buy these chemicals is not needed; Plant and Equipment- The machinery required in these paper mills are very less except for Beating and compressing. So, the capital investment on the machinery is also less. It does occupy very less space and also saves plant area.