Shares of paper companies surged up to 17 percent in early trade on August 25 after the government imposed a Minimum Import Price (MIP) on Virgin Multi-layer Paper Board (VMPB), a move aimed at curbing cheaper imports.
Tamilnadu Newsprint and Papers Ltd (TNPL) led the rally, building on early gains to climb by 17 percent to an intraday high of Rs 179.90 on the NSE after two consecutive sessions of decline.
JK Paper also advanced sharply, rising 15 percent after four days of losses. West Coast Paper Mills jumped 13.71 percent, while Orient Paper and Industries rose 8.16 percent. Malu Paper Mills and Andhra Paper also gained up to 12 percent in early trade.
The Directorate General of Foreign Trade (DGFT), in a notification, had said that the MIP will remain in force till March 31, 2026. By fixing a floor price for imports, Centre has effectively made cheap foreign supplies costlier, providing relief to domestic producers.
Paper companies in India have long complained of competition from low-priced imports, particularly from Indonesia and China. The Indian Paper Manufacturers Association had in June sought an anti-dumping probe against imports of VMPB from Indonesia.
Virgin Multi-layer Paper Board is widely used in packaging for pharmaceuticals, FMCG, food and beverages, electronics, cosmetics, liquor, and also in publishing.
By fixing a minimum import price, the government has made cheap imports costlier. This protects local companies, as importers either have to pay more for imported paper board or buy from Indian producers. As a result, domestic demand is expected to shift towards Indian paper companies.
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