The Hindu Business Line : Paper producers want Govt to retain import duty at present level

The customs duty on imports of paper ranges from 0-16 per cent. The industry fears that a lowering in peak customs duty would result in import inflow hurting the domestic players.

"At least until the domestic issues faced by the industry are settled, we have asked the Government to leave the customs duty untouched,'' Mr Rajeev R. Vederah, President, Indian Paper Manufacturers' Association (IPMA), told Business Line.

India's paper industry is growing on an average at 5.4 per cent. While newsprint and writing paper are growing at 4-4.5 per cent, packaging paper and paperboard are growing at a much higher rate, according to Mr Vederah, who is also the Joint Managing Director of Ballarpur Industries Ltd.

Currently, supply matches demand. As supply begins to chase demand, the industry needs to step up its production to keep pace.

The IPMA, represented by paper manufacturers who use wood and bamboo as raw material (as opposed to those who use rice straw, wheat straw and bagasse), has urged the Government to allow the industry the use of a portion of the degraded land for agro-forestry.

"We have sought public-private participation to have captive plantation around our plants,'' Mr Pradeep Dhobale, Chief Executive, ITC Ltd's Paperboards and Specialty Papers Division, said.

The country has 65 million hectares of degraded land. "We are asking the government to allow agro-forestry in these degraded and marginal land,'' Mr Vederah said.

Demand for paper is growing on the back of a GDP growth of seven per cent, increasing literacy, higher environmental concerns surrounding packaging, rising industrial activity and exports, they said. Exports have been growing at 20 per cent.

Growth in packaging paper has been spurred by environmental concerns about the use of plastic. "These concerns have led to a 30 per cent increase in the growth of paper cups,'' Mr Dhobale said.

At present, 40 per cent of the total paper produced in the country comes from manufacturers using wood and bamboo as raw material; 27 per cent of paper comes from companies which use rice straw, wheat straw and bagasse as inputs and the remaining comes from recyclers.

The industry also burdened by excise, octroi and other tariffs is seeking a uniform excise duty of eight per cent.

Faced with rising input costs, the industry has had to work on cost management by various measures including increasing economies of scale, Mr Vederah said.

"India loses its competitive edge because of higher prices of raw material such as wood as compared to other paper exporting countries,'' he said.

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