India’s commerce ministry has launched an anti-subsidy investigation into imports of multi-layer paperboard from China and Indonesia, signalling a closer scrutiny of trade practices in the sector. The move follows concerns from domestic manufacturers over alleged subsidised imports impacting local industry competitiveness.

According to a government statement issued on Friday, the probe will examine whether producers in China and Indonesia have benefited from subsidies that allow them to export multi-layer paperboard to India at unfairly low prices. If established, such practices could distort market dynamics and harm domestic producers.

The investigation is being conducted under India’s trade remedy framework, which allows authorities to impose countervailing duties if imports are found to be subsidised and causing material injury to the local industry. Officials will assess the extent of subsidies, pricing patterns, and their impact on Indian manufacturers before arriving at a final determination.

India has emerged as a significant market for paper and paperboard imports in recent years, driven by rising demand from the packaging, e-commerce, and consumer goods sectors. Data from UN COMTRADE shows that India imported paper and paperboard products worth approximately USD 857 million from China in 2024, underscoring the scale of trade exposure.

Industry stakeholders have raised concerns that subsidised imports could undercut domestic production, leading to reduced capacity utilisation and financial stress for Indian firms. The probe is expected to provide clarity on whether trade remedial action is warranted to ensure a level playing field.

If the investigation confirms the presence of actionable subsidies, India may impose countervailing duties on imports from the two countries. Such measures would aim to protect domestic manufacturers while maintaining fair competition in the market.

The development comes amid a broader trend of increased trade scrutiny by India across sectors, as policymakers seek to balance import dependence with support for domestic industry under its self-reliance agenda.

Source: BW Businessworld