Domestic industry frets over surge in paper imports
The import of paper and paperboard in India rose by over 60 per cent during the first half of the current financial year to touch an all-time high of 10.5 lakh tonnes, as against 6.5 lakh tonnes a year ago, according to the Directorate General of Commercial Intelligence and Statistics (DGCIS) data released on Wednesday.
Alarmed by the situation, the domestic paper industry has asked the government to slap anti-dumping or safeguard duty on paper imports. In a letter to the Ministry of Commerce and Industry, the Indian Paper Manufacturers Association (IPMA) said, “Unbridled growth in import of paper is hurting the interests of the domestic industry and the country. The industry does not enjoy a level playing field vis-à-vis duty-free imports from countries where the cost of production of paper is a fraction of cost in India, as raw material, inputs and energy are much cheaper and easily accessible there.”
IPMA said the import of paper and paperboard from the ASEAN countries, with nil rate of import duty under a free-trade agreement (FTA), had more than doubled to 2.1 lakh tonnes from 0.8 lakh tonnes.
In the past six years, imports have risen at a compound annual growth rate (CAGR) of 15.8 per cent in value terms to Rs 8,237 crore in 2016-17 from Rs 3,411 crore in 2010-11. In volume terms, imports grew by 17.6 per cent to 14.2 lakh tonnes in 2016-17 from 5.4 lakh tonnes in 2010-11.
“Paper is being imported at a cost which in many cases is less than input cost in India. India is one of the few growing markets for paper. However, most of the growth in demand is being met by imported paper while domestic capacities are lying underutilised,” said Saurabh Bangur, president, IPMA.
Inadequate raw material availability is a major constraint for the dometic paper industry.
Also, mill-delivered cost of domestic wood in India is higher by almost $30-40 a tonne as compared to other Asian countries. Due to this, the cost of paper production in India is higher by $100 a tonne.
The Centre’s policy of extending preferential tariff treatment to the import of paper and paperboard under trade agreements is further aiding in imports.
Under the India-ASEAN FTA, import duties on almost all tariff lines under paper and paperboard have been progressively reduced, and from a base rate of 10 per cent, the basic customs duty came down to zero. Under the India-Korea comprehensive economic partnership agreement, the basic customs duty has been progressively reduced and will be zero per cent with effect from January 2018. Conventional markets for China and Indonesia have been the US and the European Union. In both these markets, anti-dumping and/or anti-subsidy tariffs have been imposed on the import of paper and paperboard to protect their domestic industries, Bangur said.