The Indian Newspaper Society (INS) on 4 March 2024 appealed to the government to reconsider the 5% import duty on newsprint, signaling a critical need for support. The industry, still key to information dissemination, is grappling with multiple challenges that have cast a shadow over its stability and growth.
With the Indian newspaper sector heavily dependent on imports (constituting 50% of the total demand), the duty has become a significant impediment to the industry’s smooth operation. At one time, of the 2.2 million metric tons per annum consumption of newsprint in India, about 1.5 million tonnes were met through imports, as per data from the Indian Newsprint Manufacturers Association. However, current government import data indicates that consumption has fallen drastically and that newsprint imports in the current year are likely to be in the region of only 700,000 metric tons although global prices have been benign.
Recent supply chain headwinds
The first Covid-19-induced lockdown in the 2020-2021 financial year dealt a severe blow to the newspaper industry. Circulation and distribution came to a halt, particularly in urban centers where housing societies restricted delivery personnel’s entry. Despite initial apprehensions about the virus’s spread through newspapers, later debunked by the medical fraternity, the damage was done.
The disruption in the global supply chain, coupled with rising costs due to the Russia-Ukraine conflict, has emerged as a primary factor impacting newsprint imports. Logistical complexities, the depreciation of the Indian rupee, conflicts in the Middle East, and ongoing concerns in the Red Sea have further impacted newsprint supplies and prices.
The INS expressed grave concerns, stating, “Many newsprint mills, across the world as well as in India, have either suspended their operations or ceased newsprint production entirely, causing concerns about the continuity of supply of newsprint across the country.”
Amidst these challenges, the INS has underscored the indispensable role of the print media industry. Beyond being a source of information, newspapers play a pivotal role in providing affordable knowledge, aiding government communication, and combating online misinformation. The appeal to reconsider import duties is projected as essential to sustaining this vital sector.
Industry recovery: gradual at best
While the worst may be over for some Indian newspapers in terms of circulation, the industry’s recovery is far from uniform. Pagination and circulation numbers are actually quite far from reaching pre-pandemic levels as indicated by the newsprint consumption figures. Apart from tightening circulation, cost-saving measures include cutting the number of pages.Â
Leading newspaper companies listed on Indian stock exchanges have reported mixed numbers in Q3 FY24. HT Media, for instance, reported a modest increase in revenue and a substantial decrease in losses. In contrast, Jagran Prakashan faced a decline in both revenue and net profit. DB Corp, however, showcased a robust performance, with significant jumps in both revenue and net profit.
HT Media announced its Q3 FY24 results in January. The company reported a 0.58% year-on-year increase in revenue and a 40.02% year-on-year decrease in loss. Compared to the previous quarter, HT Media’s revenue grew by 12.41% and the loss decreased by 73.9%.
Jagran Prakashan said its revenue fell -1.99% since last year’s same period to ₹537.65 crore in the Q3 FY24. The net profit fell -10.35% since last year’s same period to ₹73.80 crore in the Q3 FY24.
DB Corp’s revenue jumped 15.71% year on year to ₹664.77 crore in the Q3 FY24. On a quarterly growth basis, DB Corp generated a 10.44% jump in its revenue. The net profit jumped 156.79% over last year to ₹123.98 crore in the Q3 FY24. On a quarterly growth basis, DB Corp generated a 23.66% jump in its net profit. As DB Corp’s management has said, this is due to the lower price of newsprint in the past year. DB Corp has reported a 12% reduction in the consumption or overall cost of materials in the first three quarters of the current financial year, compared to the previous financial year.
This article has been edited for improving its content on 20 March 2024. – The editor.
