The domestic paper manufacturers are making a fervent pitch for hike in Customs duty on paper imports from Asian countries.

From the current import duty level of 'nil' rate (under the Indo-ASEAN FTA), the Customs duty has to be increased to 10 per cent, Sanjay K Singh, new President of the Indian Paper Manufacturers' Association (IPMA), has said.

"The import duty has to be hiked to 10 per cent on paper imports from Asian countries. This should be the duty level till the domestic industry becomes healthy," Singh told BusinessLine .

'Nil' duty regime

Currently, large quantum of paper gets imported into India from Asian countries like China and Indonesia taking advantage of the 'nil' duty regime under the Indo-ASEAN Free Trade Agreement.

Singh said the domestic paper industry was getting squeezed on both the raw material front as well as the increased imports of end products.

The outgoing IPMA President, Yogesh Agarwal, said significant quantities of paper and paperboards have started making inroads into the country.

This is happening while the domestic paper industry is operating under extremely challenging conditions, Agarwal said.

Hike in imports

In the last three years, imports have risen at a compound annual growth rate (CAGR) of 21 per cent in value terms ($ 993 million in 2013-14) and 18 per cent in volume terms (0.87 million tonnes in 2013).

Agarwal said imports are growing at a very high rate as compared to the increase in domestic production rate.

Similar trend is expected to continue in the future unless measures are taken to discourage imports in view of availability of domestic capabilities and capacities, he said. .

To provide a level playing field to the domestic industry, paper and paper board products should be kept in the negative list (no preferential treatment) while reviewing the existing FTAs and formulating new FTAs, IPMA has said.

srivats.kr@thehindu.co.in

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