The government may impose additional import duty of 20 per cent on some paper products in order to protect domestic manufacturers like JK Paper, Ballarpur Industries and ITC from surge in imports of the product.
The Directorate General of Safeguards (DGS) under the Ministry of Finance has recommended imposition of safeguards duty — an emergency import duty — after domestic producers complained to it. These products include coated and uncoated paper, paper board and copy paper.
The domestic producers, who had complained, account for about 80 per cent of the total production of the item. Imports of these products have been taking place from China, Indonesia, Finland, Sweden, Germany and the US.
The domestic manufacturers told the DGS that the surge in imports of these products have impacted their sales, production and profitability.
They alleged producers in those countries are exporting at low prices as their domestic market has contracted sharply because of the current economic crisis.
Moreover, the prices of the imported paper products have also been consistently falling, due to increased imports, the domestic producers said.
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Domestic manufacturers have claimed that import prices have shown a steep decline in past six months from weighted average CIF (Cost, Insurance and Freight) value of $817 a tonne in September 2008, when the recession started, to $680 a tonne in February 2009.
The additional import duty, which conforms to norms fixed by the World Trade Organization, will be levied for a period of 200 days, after which it could be extended.
The DGS has recommended safeguard duty on 10 products since January 2009, mostly related to chemicals and metal products.
Ministry of Commerce has also launched investigations into allegations of dumping of products from overseas countries. But, anti-dumping investigations are long drawn, and hence domestic producers prefer to invoke imposition of safeguard duty.