Jan 12, 2017 02:05 PM IST IST | Source: PTI

Local paper industry seeks curb on cheaper imports

The industry also demanded that the government should impose 10 percent special additional customs duty on overseas purchase of paper and paperboard.

Grappling with high cost of raw materials, the domestic paper industry today urged the government to immediately curb cheaper imports from ASEAN countries by imposing 10-15 percent safeguard duty.

The industry also demanded that the government should impose 10 percent special additional customs duty on overseas purchase of paper and paperboard.

At present, imports of paper and paperboard attract 10 percent customs duty. It has been brought to a zero level to ASEAN countries under the free trade agreement and recently duty-free shipments have been permitted from Korea.

"There is a surge in imports from ASEAN countries, especially from Thailand at zero duty. This is affecting domestic players and we have asked the government to impose a safeguard duty of 10-15 percent," Indian Paper Manufacturers Association's (IPMA) newly elected President Saurabh Bangur told PTI on the sidelines of 17th annual general meeting here.

The association has also suggested imposing 10 percent special additional duty on paper imports to restrict cheaper shipments from non-ASEAN countries as well, he said.

IPMA has submitted these recommendations as part of the pre-budget proposal to the government.

Bangur, who is also vice chairman of Kolkata-based Westcoast Paper Mills, said restricting imports are necessary as the domestic paper industry is "struggling to sustain because of high cost of raw material, especially of wood".

The production cost is very high in India when compared with other countries because of higher cost of wood, he said.

"The cost of wood, a main raw material in paper manufacturing, is about USD 100 a tonne in India, while it is only USD 30-40 a tonnes in other countries. So, wood price comprises 50 percent of the total cost of production of paper in India," he explained.

The production cost is higher considering 3 tonnes of wood required for making 1 tonne of paper, Bangur said adding that besides higher wood price availability of the raw material has also been a constrain to the industry.

Therefore in the long term, IPMA has asked the government to make available some part of the country's degraded forest land for pulpwood plantation under collaborative arrangement, so that the Indian paper industry can access raw materials at competitive rates and become globally competitive.

"Even providing 10 percent of degraded forest land for raising pulpwood plantation in collaboration with pulp and paper industry would make available about 2.5 million hectares of productive plantation," it said.

At present, the industry needs about 100 lakh tonnes of wood and more wood will be required to meet growing demand.

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