(MENAFN- KNN India) New Delhi, Oct 22 (KNN) India's domestic paper industry has raised concerns that recent Goods and Services Tax (GST) reforms could lead to a surge in cheap paper imports, hurting local manufacturers.

The Indian Paper Manufacturers Association (IPMA) warned that the revised tax structure may make India a dumping ground for low-cost foreign paper.

According to IPMA President Pawan Agarwal, uncoated paper - commonly used in exercise books and notebooks - has been exempted from GST, bringing the Integrated GST (IGST) on imported paper down to zero.

This effectively allows foreign paper to enter the Indian market duty-free, while local producers still face embedded input tax costs.

As a result, Indian manufacturers are losing their price competitiveness. Since they can no longer claim input tax credit (ITC) for exempted products, their production costs are expected to rise.

The association estimates that this could push up notebook prices by 3–5% and textbook costs by more than 6%, directly impacting students and schools.

Industry data shows that paper imports have already doubled in recent years - from 1.08 million tonnes in FY21 to around 2.06 million tonnes in FY25, reflecting a compound annual growth rate (CAGR) of over 17%. The new GST exemption, IPMA warns, may accelerate this trend and further weaken domestic capacity.

The association has urged the government to reconsider the tax exemption or introduce measures to protect local manufacturers. Without corrective steps, it cautioned, the reform could undermine India's“Make in India” initiative and threaten thousands of jobs linked to the paper manufacturing ecosystem.

(KNN Bureau)

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