New Delhi:
Ever since Covid outbreak, both inward and outward supply chains of the Paper Industry have been totally disrupted and are yet to fully recover. Benefitting from the vulnerable domestic scenario, imports of paper have risen substantially, Indian Paper Manufacturers Association (IPMA) has stated in a communication to the Government.
Indian Paper Industry is operating under extremely challenging conditions post-Covid in view of demand compression which have been compounded by substantial quantities of paper being imported into the country at significantly lower costs, especially under the aegis of the Free Trade Agreements (FTAs) like the India-ASEAN FTA and India-Korea CEPA, and other trade agreements like the Asia Pacific Trade Agreement (APTA), which includes China.
Even in an economically challenging year, there has been no let-up in paper imports in FY20. Against import of Rs 1830 crore from ASEAN in FY19, imports of paper have gone up to 1870 crore in the first 11 months of FY20. Similarly Rs 1773 crore worth of paper imports have landed from China in Apr-Feb FY20 against Rs 1831 crore in entire FY19.
A S Mehta, President, IPMA, stated “Countries like China and Indonesia, which have significant domestic excess production capacity, are using this opportunity to push their excess inventories into India at very low prices, which attract either nil import duty under the India-ASEAN FTA or preferential import duty under APTA. This is further impacting the economic viability of many Paper Mills in India, already under stress, which will not only lead to revenue loss to the Government, but also jeopardise the incomes and employment of thousands, including farmers who are engaged in agro forestry and supply wood to Paper Industry, especially in rural areas.”
“In the last decade or so, the Writing & Printing Paper (both uncoated and coated) segment has been severely impacted due to imports flooding into the country at nil / preferential import duty. Several smaller Paper Mills, and even a few large ones, have been forced to shutdown their operations due to commercial unviability. There is adequate production capacity in the country which is currently under-utilised”, according to to Rohit Pandit, IPMA Secretary General.
In its communication to the Government, IPMA has urged that the basic customs duty on import of paper should be increased to 25% (WTO Bound Rate is 40%) from the existing 10%. In order to provide a level playing field to the domestic Paper Industry, paper should be placed in the Negative List of all existing and future FTAs. Import of paper should be allowed only on the basis of Actual User License so that only genuine users import the right quantity of paper for their consumption. That is, the import policy should be changed from ‘Free’ to ‘Restricted’. This would curb wrong practices being adopted in the market, according to IPMA.
IPMA has also called for Non-Tariff Measures (NTMs) / Technical Barriers to Trade (TBT), like making BIS marking mandatory, to be urgently imposed on imports of paper, along with implementation of a Paper Import Monitoring System. Import of Stocklot of all grades of paper should be banned, like done recently for coated paper. Further, IPMA has asked for import of paper to be allowed only through one designated port in the country so that there is proper monitoring of imports coming into the country in terms of valuation, quality, classification, etc. This will help greatly in curbing unscrupulous practices, revenue loss to the Government, and benefit the end consumer.
