(MENAFN- KNN India)
New Delhi, Nov 21 (KNN) Imports of paper and paperboard into India have surged by 3.5 per cent in the first half of the 2024-25 fiscal year, reaching 992,000 tonnes.
This uptick has been largely driven by a significant increase in shipments from China, which saw a 44 per cent rise compared to the same period last year, according to the Indian Paper Manufacturers Association (IPMA).
Despite India having sufficient domestic production capacity, the growing import volumes are adversely affecting the local paper manufacturing industry.
The spike in imports follows a 34 per cent increase in 2023-24, primarily due to higher shipments from ASEAN countries. This trend marks a worrying continuation of post-COVID import surges, which are hampering the growth of India's paper industry.
IPMA President Pawan Agarwal expressed concern, noting that the surge in imports, particularly from China, Chile, and recently, Indonesia, is critically undermining the growth of domestic manufacturers, especially in the virgin fibre paperboard segment.
Imports from these countries have more than tripled since 2020-21, exacerbating the strain on local producers.
Agarwal pointed out that, despite significant capital investments made by Indian manufacturers to enhance production capacities, the prolonged gestation period for these investments combined with increased competition from predatory imports has made it increasingly difficult for the industry to remain economically viable.
The low capacity utilisation and depressed profit margins are a direct result of this influx of cheaper imported goods.
To address this issue, the IPMA has advocated for a sharp increase in the basic customs duty on paper and paperboard imports from 10 per cent to 25 per cent.
This proposal, which was presented to the finance and commerce ministries during pre-budget discussions, aims to level the playing field for domestic manufacturers and protect the integrity of the local industry, particularly against unfair trade practices.
The IPMA's recommendation falls well below the World Trade Organisation's bound rate of 40 per cent, highlighting the severity of the challenge faced by India's paper sector.
(KNN Bureau)
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