Import of paper and paperboard continues unabated. After a 25 per cent jump in FY23 in volume terms, paper imports have further risen by 43 per cent in the first half of FY24, according to DGCI&S data.
The surge in imports is mainly due to a 257 per cent growth in import of paper and paperboard from the ASEAN region at zero import duty under a free trade agreement.
In H1 FY24, import of paper and paperboard increased to 9.59 lakh tonnes from 6.72 lakh tonnes in H1 FY23. Imports from ASEAN grew from 81,000 tonnes in H1 FY23 to 2.88 lakh tonnes in H1 FY24.
- Opinion| Fixing the paper industry
While imports of all grades of paper have risen sharply, imports of uncoated writing and printing paper have risen 267 per cent in volume terms in H1 FY24 over H1 FY23.
In value terms, too, import of paper and paperboard has risen by 10 per cent in H1 FY24 and paper worth Rs 6,481 crore landed in India in the first half of the current fiscal, notwithstanding the adequate domestic capacities to manufacture almost all grades of paper, according to the Indian Paper Manufacturers Association (IPMA).
Rising input costs
Even as the industry is grappling with the issue of producing paper and paperboard at competitive prices in view of the significant increase in raw material and input costs, it is hamstrung by the preferential tariff treatment of paper and paperboard imports under various free trade agreements, said Pawan Agarwal, IPMA president.
Besides the zero import duty on paper under the ASEAN and Korean FTAs, India has extended import tariff concessions to China (and other countries) under the Asia Pacific Trade Agreement (APTA), offering 30 per cent margin of preference, thereby reducing the basic customs duty from 10 to 7 per cent on most grades of paper.
Going forward, imports are expected to accelerate in view of the economic slowdown in China, the trade restrictions and import duties imposed by the US and European Union to protect their domestic markets, and the large new paperboard capacities coming up in Indonesia and China.
IPMA has urged the government to keep paper and paperboard in the negative/ exclusion list, where there is no preferential treatment in terms of import tariff, while urgently reviewing existing FTAs (ASEAN, South Korea and Japan).
Issuance of quality control orders for different grades of paper will not only ensure supply of quality products to Indian consumers but also check the import of sub-standard products. Suitable safeguards, and anti-dumping and countervailing duties on imports of various grades of paper should be expeditiously imposed, especially after the recommendation of the Directorate General of Trade Remedies (DGTR), said Rohit Pandit, IPMA secretary-general.