The paper manufacturing industry
wants action by the central government to restrict import.
During 2017-18, import of paper and paperboard from the Asean bloc, China and South Korea rose 32.6 per cent, 56.4 per cent and 57.2 per cent, respectively, over FY17. In volume terms, import from China was 510,000 tonnes; from Asean and South Korea, 330,000 and 150,000 tonnes, respectively.
Saurabh Bangur, president, Indian Paper Manufacturers Association (Ipma), says India is the fastest growing market (seven to eight per cent a year) for paper and paperboard in the world. And, the increasing import is a threat to the domestic industry.
There is demand for better quality packaging, for consumer goods, from the drugs and pharmaceutical sector, for over-the-counter medicines and from the increasing preference for ready-to-eat foods. Domestic manufacturers are struggling to do so at competitive prices — they say they face high raw material and energy cost. Cheaper import, they say, is facilitated by the preferential tariffs extended under Free Trade Agreements.
“Domestic manufacturers have invested huge amounts in the recent past to upgrade and implement clean and green technologies, in product quality, farm forestry, etc. More investments are in the pipeline. Such large investments cannot and should not be jeopardised by allowing import at zero or preferential import duties,” said Bangur.
Between 2010-11 and 2017-18, import of paper and paperboard had a compound annual growth rate (CAGR) of nearly 19.5 per cent, from 0.5 million tonnes to 1.9 mt. In this period, import from Asean countries, China and South Korea had a CAGR of 41.8 per cent, 18.3 per cent and 57.9 per cent, respectively.
These seven years coincide with the onset of a progressive reduction in basic customs duty undertaken by India on import of paper and paperboard under the FTAs signed with Asean and Korea.
Rohit Pandit, secretary general of Ipma, said: “The government needs to provide a level playing field to domestic manufacturers vis-a-vis imports. Foreign manufacturers have easy access to captive plantations and, hence, raw material; also, energy at far more competitive costs in their respective countries. While foreign manufacturers can produce at much lower costs due to the supportive policies of their respective governments, they face no tariff barriers when they export to our country.”