Monitor imports, hike duty to 25%: Paper industry

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The Indian Paper Manufacturers Association has urged the government to set up a paper import monitoring system and enhance the import duty on paper to 25 per cent, from 10 per cent, to check unmindful dumping by countries that have signed trade agreements with India.

In the pre-Budget consultations with the Ministry of Finance, IPMA representatives urged the government to change import policy on paper to ‘restricted’ from ‘free’ to curb the unfair practices such as under-invoicing, mis-declaration and dumping to avoid import duty payment.

AS Mehta, President, IPMA, said while the domestic industry is operating under extremely challenging conditions, substantial quantities of paper and paperboard are imported at significantly lower costs and duty free under FTAs.

High cost of raw materials, coupled with significant increase in fuel cost and other inputs have resulted in a substantial increase in the cost of domestic manufacture of paper and paperboard, he said.

Both under India-ASEAN FTA and India-Korea CEPA, import of paper in India is currently at nil rates of duty. Under the Asia Pacific Trade Agreement, India has extended import tariff concessions to China (and other countries) and offered 30 per cent margin of preference, thereby reducing the basic customs duty from 10 per cent to 7 per cent.

Paper consumption in India is expected to touch 23.5 mtpa in next five years, from about 20 mtpa. However, it is feared that most of the increase in demand will be met by imported paper. Duty-free imports are making most small and medium paper mills in India commercially unviable, and also threatening the livelihoods of thousands of farmers engaged in agro-forestry and supplying wood to paper mills.

In the last nine years, imports have risen at a CAGR of 11 per cent in value terms to ₹8,972 crore last fiscal against ₹3,411 crore logged in 2010-11 and in volume terms to 1.64 mtpa, from 0.54 mtpa in the same period.

Imports are growing at a higher rate compared to the increase in domestic production rate leading to domestic installed capacities lying underutilised, said Rohit Pandit, Secretary-General, IPMA.

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