Paper industry hit by duty-free imports

In April-July, imports have grown 40%

Reels of newsprint being unloaded in a newspaper godown in Kochi. Paper industry in the country faces crisis as acute scarcity of raw material and lack of effective industrialisation policy has pulled production down. About 35 per cent of paper produced is from wood, 30 per cent from agro residues and the rest from waste paper. With demand for paper likely to go up to 94.35 lakh tonnes from current 55 lakh tonnes by 2015, an estimated Rs. 50,000 crores need to be invested to enhance current production capacity. Photo: K. K. Mustafah 02/11/2005

A sharp increase in import of paper and paperboard, especially writing and printing paper, this financial year has turned into a matter of concern for the domestic industry.

Import of coated paper, which totalled 45,492 tonnes in February this year, shot up to 73,792 tonnes in July. In the same period, import of uncoated paper too rose from 13,347 tonnes to 32,887 tonnes, according to data with Indian Paper Manufacturers Association (PMA).

Impact of trade pacts

Import of paper and paperboard [excluding newsprint] has been steadily on the rise for the last six years,” said Rohit Pandit, secretary general, PMA. “Import of these items from ASEAN countries have grown almost 43% in volume in the last six years. Imports from South Korea alone have risen 58%.”

Since 2014, there has been no import duty on paper and paperboard from ASEAN countries. Under the India-Korea CEPA, the basic customs duty has been reduced gradually with a 0% target by January 1. Between April and July this year, the growth in imports has been more than 40%, he said. In the writing and printing paper segment, import of coated, uncoated, and copier papers is significant, he added.

“The domestic industry in India has started feeling the impact and the government should increase import duty on paper and paperboard to 20%,” the the Indian Agro & Recycled Paper Mills’ Association has demanded.

R. Krishnaswamy, vice-president of the association, said that for wood-based paper mills in India, the cost of wood is ‘very high’. If it is $100 a tonne in India, the price of wood in Indonesia, with which Indian suppliers compete, is only $40 a tonne. Hence, the price of paper is also lower, he said.