The import of paper and paperboard into India has gone up from 25 percent in FY23 to 37 percent in the first nine months of FY24. Imports stood at 1.47 million tonnes worth INR 10,000 crore in the April-December period of the current fiscal.
Feb 27, 2024
Imports of paper and paperboard into India continue to surge. After a 25 percent jump in FY23 in volume terms, the imports have further gone up by a massive 37 percent in the first nine months of FY24, according to the latest data released by DGCI&S. Imports of paper and paperboard in the April-December period of the current fiscal stood at 1.47 million tonnes as compared to 1.07 million tonnes in the corresponding period of last year, and are even higher than 1.44 million tonnes imported in the entire FY23.
Mr. Pawan Agarwal, President of the Indian Paper Manufacturers Association (IPMA), said, “Imports of paper and paperboard in huge volumes and worth INR 10,000 crore in 9 months are impacting the Make-in-India drive as well as depriving employment to 5 lakh committed farmers who are aligned with the domestic Paper Industry through agro / farm forestry. There is more than adequate domestic capacity in India to manufacture almost all grades of paper and such indiscriminate imports are adversely impacting the commercial viability of most paper mills in the country.”
Watch: Top Paper Companies 2023
According to the Government data, out of over 900 Paper Mills in the country, currently only 553 are operational. The surge in imports is mainly due to a massive 142 percent growth in imports of paper and paperboard from ASEAN, which enter the country at zero import duty under the ASEAN-India free trade agreement. Imports of all major grades of paper are showing a rising trend, with imports of uncoated writing and printing paper, coated paper, and paperboard witnessing the highest rates of growth.
The domestic industry has invested amounts to the tune of INR 35,000 crore in the recent past to upgrade and implement clean technology, product quality, agro / farm forestry, etc. and more investments are in the pipeline. Such large investments cannot and should not be jeopardized by allowing duty-free imports.
Besides zero import duty on paper under the ASEAN and Korean FTAs, India has also extended import tariff concessions to China (and other countries) under the Asia Pacific Trade Agreement (APTA) offering a 30 percent margin of preference, thereby reducing the basic customs duty from 10 percent to 7 percent on most grades of paper. There are substantial subsidies/incentives given by some of these countries, which provide their paper mills a cost advantage, not available to India’s paper mills. Taking advantage of the nil/low import duty rates and rising demand for paper in India, paper mills in these countries find India as an attractive outlet for diverting their excess inventory leading to spiraling growth in paper and paperboard imports.
Also Read: Metsä Group Announces EUR 100 Million Investment Plans for its Tissue Paper Mill in Finland
Going forward, imports into India are expected to further accelerate given the economic slowdown in China, trade restrictions and import duties imposed by the US and European Union (EU) to protect their domestic markets, and large new paperboard capacities coming up in Indonesia and China. The recent EU Regulation on Deforestation-Free Products may also curb exports from these countries to the EU, which may further accelerate the diversion of their products to India.
IPMA has urged the government to keep paper and paperboard in the negative / exclusion list, that is no preferential treatment in terms of import tariff, while urgently reviewing the existing FTAs (ASEAN, South Korea, and Japan) and formulating new FTAs. Issuance of Quality Control Orders (QCOs) for different grades of paper will not only assure a supply of quality products to Indian consumers but also check the import of sub-standard products into the country. Suitable safeguard, 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), stated Mr Rohit Pandit, IPMA Secretary General.
