Paper industry is primarily dependent upon forestbased raw materials. Growth of paper industry in India has been constrained due to high cost of production caused by inadequate availability and high cost of raw materials, power cost and concentration of mills in one particular area. Government has taken several policy measures to remove the bottlenecks of availability of raw materials and infrastructure development.This paper explores the outcome in terms of operational performance, of green project partnership in the supply chain management system. Green project partnership, defined here as the degree of interaction between organizations in the supply chain regarding pollution prevention, can take place upstream with the suppliers and downstream with the customers. Using the data from a survey of the paper industry, the linkage between green project partnership and operational performances was analyzed. The results indicate that green project partnership with customers was positively linked to quality, flexibility and environmental performance while partnership with suppliers was associated with better delivery performance.