In H1 FY24, imports of paper and paperboard have grown to 959 thousand tonnes as compared to 672 thousand tonnes in H1 FY23. Imports from ASEAN grew from 81 thousand tonnes in H1 FY23 to 288 thousand tonnes in H1 FY24.

While imports of all grades of paper have risen sharply, imports of uncoated writing and printing paper have shown a growth of 267% in volume terms in H1 FY24 over H1 FY 23.

In value terms too, imports of paper and paperboard have risen by 10% in H1 FY24 and paper worth Rs 6,481-crore landed in India in the first half of the current fiscal notwithstanding the adequate domestic capacities to manufacture almost all grades of paper, the Indian Paper Manufacturers Association (IPMA) stated.

Even as the industry is grappling with the issue of producing paper and paperboard at competitive costs in view of significant increase in raw material and input costs, the industry is hamstrung by the preferential tariff treatment to paper and paperboard imports under various free trade agreements (FTAs) signed in the past, Pawan Agarwal, president, IPMA.

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 30% margin of preference, thereby reducing the basic customs duty from 10% to 7% on most grades of paper.

Taking advantage of the nil / low import duty rates and a burgeoning demand for paper in the country, these countries find India as an attractive outlet for diverting their excess inventory leading to spiralling growth in paper imports.

Going forward, imports into India are expected to accelerate in view of the economic slowdown in China, trade restrictions and import duties imposed by the US and European Union to protect their own domestic markets, and large new paperboard capacities coming up in Indonesia and China.

Apart from the overall negative impact of duty-free imports on the domestic paper industry, it is making most small and medium paper mills in India commercially unviable leading to revenue loss to the Government and outflow of substantial foreign exchange. According to DPIIT, out of over 900 paper mills in the country, currently only 553 are operational. This runs contrary to the spirit of Aatmanirbhar Bharat and Vocal for Local.

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 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 Rohit Pandit, IPMA Secretary General.