Paper imports touch a new high, raising industry concern
Paper and paperboard imports have registered the highest-ever annual growth of 31 per cent to 1.9 million tonnes in the financial year ended March 2018.
Imports were at 1.4 mt in FY17, according to the latest data released by the Directorate General of Commercial Intelligence and Statistics. Including newsprint, total imports touched 3.3 million tonnes last fiscal, it added.
Imports of paper and paperboard into India from ASEAN countries, China and South Korea were up 33 per cent, 56 per cent and 57 per cent, respectively. In volume terms, shipments from China reached 5.1 lakh tonnes, while imports from ASEAN and South Korea were pegged at 3.3 lakh tonnes and 1.5 lakh tonnes last fiscal.
In the seven years imports of paper and paperboard have increased at a compound annual growth rate of 19 per cent, from 0.5 mt to 1.9 mt.
In the same period, imports from ASEAN countries, China and South Korea were up CAGR of 42 per cent, 18 per cent and 58 per cent, respectively.
The sharp increase in imports comes on the back of progressive reduction in the basic Customs duty by India on paper imports under the free trade agreements signed with ASEAN and South Korea.
Expressing concern, Saurabh Bangur, President, Indian Paper Manufacturers Association, said India is the fastest growing market for paper in the world with a growth rate of about 8 per cent per annum on the back of greater emphasis on education and literacy by the government coupled with growth in organised retail trade.
Demand for better quality packaging of FMCG products marketed through organised retail, rising healthcare spends, besides preference for ready-to-eat foods are the key demand drivers for packaging paper.
However, he said domestic manufacturers are grappling with the issue of production cost due to high raw material and energy cost, and facing intense competition from cheap imports flooding the domestic market due to preferential tariffs extended under the FTAs.
Huge investments made by domestic manufacturers should not be jeopardised by allowing preferential import, said Bangur.
Rohit Pandit, Secretary-General, IPMA, said the government needs to provide a level playing field to domestic companies against imports as foreign manufacturers have easy access to captive plantations for raw material and low energy cost.