Paper industry asks government to retain customs duty to curb cheap imports

08/03/2012 12:00 - 390 Views

New DelhiIn a bid to protect Indian paper manufacturers from cheap imports, mostly from Indonesia and China, the industry has asked the government to retain the existing customs duty in the forthcoming Budget.

In a submission to the finance ministry, the Indian Paper Manufacturers Association (Ipma) has said that the industry has become 'vulnerable’ to imports as developed economies like US and European Union – the traditional importers – have imposed hefty anti-dumping duties on import of paper from China.

“Indonesia and China enjoy huge export incentives. While the US and EU have taken timely measures to face the onslaught of unbridled export by these countries, India has failed to impose the safeguard duty. Consequently, these export-led economies in Asia continue to target the fragile Indian market,” Ipma secretary general R Narayan Moorthy told FE.

Ipma has urged the finance minister to retain the peak rate of basic customs duty at 10% at the current level on paper and paper-boards and also re-introduce the component of special additional duty. It has asked the government to keep paper in the negative list in bilateral and multilateral trade treaties being entered into with various countries.

Urging the government to help the industry tackle increasing competitiveness, Ipma has asked for zero duty on import of fibre, such as wood logs, wood chips and all types of wood pulp and waste paper, as India is a fibre-deficient country.

In the absence of a core-sector status, the paper industry has been suffering on account of erratic supply of quality coal from local collieries, forcing most paper mills to use imported coal for their energy needs. The effective customs duty on coal works out to nearly 10%. Ipma has asked for consideration of duty-free import of coal to overcome the crisis.

The paper industry, estimated at R25,000 crore, also has asked for assistance in agro-forestry initiatives as enabling policies for captive plantations are non-existent in India.

The paper industry has been growing around 7-8% annually and has sought lower rates of interest to farmers for raising pulpwood plantations as well as tax-free trade of produce.

From 7.5 kg per capita consumption during 2007-08, the domestic consumption of paper has gone up to 9.3 kg during the current fiscal. The global average per capita consumption of paper is around 45 a kg in India against 312 kg in the US.

Even China has a per capital paper consumption of 42 per kg, while countries, such as Indonesia and Malaysia, have per capita paper consumption at around 22 kg and 25 kg per annum, respectively.

Source: financialexpress.com