Demanding a level playing field for the paper industry, the Indian Paper Manufacturer Association (IPMA) in its pre-budget submissions is urging the government to increase the basic customs duty on the import of paper and paperboard from 10% to 25% as India’s WTO-bound rate is 40% on these products.
Along with the hike, the association has demanded quality control orders (QCOs) for different grades of paper to ensure the supply of quality products to Indian consumers and check the import of sub-standard products into the country.
Pawan Agarwal, president of IPMA, urged the government to keep paper and paperboard on the negative list while reviewing the existing FTAs (ASEAN, South Korea, and Japan) and formulating new ones. He mentioned that any increase in customs duty will not impact the duty-free imports coming into the country under the FTAs.
According to him, taking advantage of the zero or low import duty rates in India, some countries find India an attractive outlet for diverting their excess inventory. “They are using India as their dumping ground, which is directly hurting the Indian paper industry and making it difficult for the small and medium paper mills to sustain.”
“Raw material in India is more expensive than in countries such as Indonesia and China. Other countries have access to raw materials such as wood and coal at cheaper rates, which is not the case in India. Commercial plantation is also not allowed. So, these small disadvantages accumulate to make a larger one, that makes the domestic paper industry commercially unviable,” said Rohit Pandit, secretary general, IPMA.
The association noted that the domestic market can contribute to the paper needs of the country but it has been underutilized due to cheaper import rates and duty-free imports. “What is hurting all the more is the fact that the imports of paper and paperboard into India have been increasing despite adequate domestic production capacity straddling all kinds of paper. Imports are growing at a rate higher than the growth in domestic production leading to underutilization of domestic installed capacity in the country,” Agarwal said.
According to IPMA, the domestic industry has invested huge amounts in the recent past to upgrade and implement clean technology, product quality, agro/farm forestry, and more investments are in the pipeline. “The country needs certain regulated policies that will empower the domestic paper industry to bloom. Increasing import rates can be one of the many tactics that could give a push to the Indian paper industry.”
