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India represents an island of growth for the paper industry as the global market — particularly developed countries — witnesses declining demand.
“The Indian market has become attractive to pump in cheaper imports, harming the prospects of the domestic industry. The government will have to consider levying an anti-dumping duty,” said AS Mehta, President of the Indian Paper Manufacturers Association (IPMA).
Growth drivers
“India is the fastest growing market in the world for paper driven by an expanding middle class, urbanisation, rise in disposable incomes and exposure to international trends leading to lifestyle changes. All these have provided a window for international companies to pump in cheaper imports that can cause harm to the domestic market and various manufacturers,” said Mehta, who also serves as President and Director of JK Paper.
After a closed door meeting of CEOs of the paper sector, held on the sidelines of the event Papertech 2019, Mehta told BusinessLine that inadequate raw material availability and the government policy of extending preferential tariff treatment to paper imports under free trade agreements (FTAs) have left the industry exposed to cheap imports.
“India’s per capita paper consumption is about 13 kg, against the global per capita of 57 kg. Paper consumption in India is growing at 6-7 per cent annually and the domestic industry is fighting for its rightful place. And at this time, imports cause a sever strain on the finances of domestic companies which employ lakhs of people,” he added.
Preferential treatment
Over the past eight years, paper imports have risen at a CAGR of 14 per cent in volume terms. Imports from ASEAN and South Korea have grown 34 per cent and 42 per cent respectively.
Following a lot of representation from the IPMA, an anti-dumping duty on the import of copier paper was implemented last year.
Rohit Pandit, Secretary General, IPMA, said: “Of the 800-odd paper manufactures in the country, about 300 are non-functional. While the big companies are functioning at about 90 per cent capacity, the rest are functioning at about 80 per cent.”
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