Indian Paper Mills Association calls for 25% import duties

Indian paper imports grow at 13% CAGR over nine years

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Paper, Origami. Photo Jonas Tebbe via Unsplash
Paper, Origami. Photo Jonas Tebbe via Unsplash

The Indian Paper Mills Association has written to the central government, suggesting that import duties should be raised to stop the surge in paper imports. “The compound annual growth rate (CAGR) in paper import to India in the last nine years (between FY11 to FY20) is over 13%. This is one of the highest amongst all the sectors affected by the surge in imports,” said AS Mehta, president, IPMA.

According to IPMA, imports of paper from the ASEAN countries and South Korea under the India-ASEAN free trade agreement (FTA) and India-Korea CEPA, respectively, at nil import duty, went up by 18% and 9% respectively during the 2019-20 financial year ending 31 March 2020. India’s import of paper from China has surged by 14% to 2,89,000 metric tons in FY 2019-20, according to the latest data released by DGCIS. Total paper imports by India went up by 11% to 1.6 million metric tons. Chinese imports to India enjoy a margin of preference of 30% on most paper grades under the Asia Pacific Trade Agreement.

Indian paper mills are reeling under immense economic pressure created by the Covid-19 pandemic and economic slowdown. In categories such as newsprint, consumption this year is likely to decline from 30 to 40% in the current year.

IPMA has urged the government to hike basic customs duties on paper to 25% and place it in the negative list for all existing and future free trade agreements. India’s paper import policy should be tweaked from ‘free’ to ‘restricted’ to halt indiscriminate imports, the paper mills have written to the Centre.

“Paper manufacturers in China and ASEAN countries enjoy access to cheap inputs and raw material and get incentives and subsidies in their countries. Allowing imports from these countries, at either nil or preferential import duties, into India does not provide a level-playing field to Indian manufacturers in the domestic market,” says the Indian Paper Manufacturers Association (IPMA) in a letter to the Union ministry of commerce and industry. Imports should be allowed only based on actual user licenses, the association said.

IPMA has also sought that imports should be allowed only through one designated port in the country so that there is proper monitoring of imports in terms of valuation, quality, and classification.

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