Local paper industry seeks curb on cheaper imports

Grappling with high cost of raw materials, the domestic paper industry today urged the government to immediately curb cheaper imports from ASEAN countries by imposing 10-15 per cent safeguard duty.
The industry also demanded that the government should impose 10 per cent special additional customs duty on overseas purchase of paper and paperboard.
At present, imports of paper and paperboard attract 10 per cent customs duty. It has been brought to a zero level to ASEAN countries under the free trade agreement and recently duty-free shipments have been permitted from Korea.
"There is a surge in imports from ASEAN countries, especially from Thailand at zero duty. This is affecting domestic players and we have asked the government to impose a safeguard duty of 10-15 per cent," Indian Paper Manufacturers Association's (IPMA) newly elected President Saurabh Bangur told PTI on the sidelines of 17th annual general meeting here.

The association has also suggested imposing 10 per cent special additional duty on paper imports to restrict cheaper shipments from non-ASEAN countries as well, he said.
IPMA has submitted these recommendations as part of the pre-budget proposal to the government.

Bangur, who is also vice chairman of Kolkata-based Westcoast Paper Mills, said restricting imports are necessary as the domestic paper industry is "struggling to sustain because of high cost of raw material, especially of wood".
The production cost is very high in India when compared with other countries because of higher cost of wood, he said.
"The cost of wood, a main raw material in paper manufacturing, is about USD 100 a tonne in India, while it is only USD 30-40 a tonnes in other countries. So, wood price comprises 50 per cent of the total cost of production of paper in India," he explained.

The production cost is higher considering 3 tonnes of wood required for making 1 tonne of paper, Bangur said adding that besides higher wood price availability of the raw material has also been a constrain to the industry.
Therefore in the long term, IPMA has asked the government to make available some part of the country's degraded forest land for pulpwood plantation under collaborative arrangement, so that the Indian paper industry can access raw materials at competitive rates and become globally competitive.
"Even providing 10 per cent of degraded forest land for raising pulpwood plantation in collaboration with pulp and paper industry would make available about 2.5 million hectares of productive plantation," it said.

Talking about industry concerns at the AGM, J K Paper
Vice Chairman and MD Harch Pati Singhania said, "We are at the disadvantage as far as wood cost is concerned. The government has come out with a draft National Agro-Forestry Policy and we as industry needs to work closely with the government."
The perception that it's a "bad industry" as it cuts wood needs to be changed and efforts should be make to ensure the government allows plantation in degraded forest land, he said.
Singhania also urged the industry to improve the economy of scale of paper business so that to earn enough profits and reinvest in capacity expansion and technology upgradation.

He further said the government's thrust on digital economy will not affect the paper consumption.
India's share in world production of paper is over 3 per cent, with production of about 14 million tonnes per annum.