The Indian Paper Manufacturers Association has sought import duty waiver on wood logs and chips to meet the domestic shortfall. The customs duty on these products works out to 9.4 per cent, and in the case of bamboo, it is 36.1 per cent.

In its pre-Budget submission, the Association said the wood and bamboo demand of the paper industry is about 11 million tonnes per annum (mtpa) and expected to touch 15 mtpa by 2024-25. With no enabling policy for industrial plantation in India, the price of wood has gone up over 60 per cent last fiscal and more than doubled in the last three years.

Shortage of supply with sharp rise in wood prices has impacted the competitive edge of the industry and the domestic manufacturers are ceding ground to cheaper imports. Currently, only 89 per cent of the built-up capacity is being utilised in view of paucity of wood.

“Paper is a raw material intensive industry with raw materials constituting 35-40 per cent of the cost of paper production. Ensuring competitive supplies of raw materials, whether from domestic sources or imported, is a must to make the concept of ‘Make in India’ a reality”, said Rohit Pandit, Secretary General, IPMA, in a statement.

IPMA has also asked the government to retain the peak rate of customs duty on import of paper and paper board. Export-led economies such as China are saddled with severe excess capacities as the major markets of the US and EU have imposed anti-dumping duties on paper imports from China.

Given export incentives and benefiting from low import duties under various trade agreements with India, China and ASEAN countries find India as an attractive outlet for diverting their excess inventory, he said.

Imports of paper, paperboard and newsprint have gone up from ₹7,152 crore to ₹11,382 crore between FY-11 and FY-14 at a compounded annual growth rate of 17 per cent.

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