Paper industry sees red as imports from China climb 14%.

Indian paper industry has been quick to raise alarm as paper imports from China went up by 14% in the last fiscal even amidst the border tensions between the two countries. India’s paper import policy should be tweaked from “free” to “restricted” to halt indiscriminate imports, the paper mills have written to the Centre.

“Paper manufacturers in China and ASEAN countries enjoy access to cheap inputs and raw material, and also get incentives and subsidies in their countries. Allowing imports from these countries, at either nil or preferential import duties, into India does not provide a level-playing field to Indian manufacturers in the domestic market,” Indian Paper Manufacturers Association (IPMA) has pointed out in a letter to the Union ministry of commerce and industry. Imports should be allowed only on the basis of actual usual license, the association said.

India’s import of paper from China has surged by 14% to 2,89,000 tonne in 2019-2020, according to the latest data released by DGCIS. During the same period, total paper import in India went up by 11% to 1.6 million tonne.

Imports from ASEAN and South Korea under India-ASEAN FTA and India-Korea CEPA respectively, at nil import duty, went up by 18% and 9% respectively during the year. Chinese imports to India enjoy a margin of preference of 30% on most paper grades under Asia Pacific Trade Agreement.

“The compound annual growth rate (CAGR) in paper import to India in the last nine years (between FY11 to FY20) is over 13%. This is one of the highest amongst all the sectors that have been affected by surge in imports,” said AS Mehta, president, IPMA.

“This surge in imports is when India has adequate production capacity, which is currently under-utilised. Even large paper mills in India have been forced to shut down due to unviability, causing job losses in thousands,” he told FE.

IPMA has also sought that imports should be allowed only through one designated port in the country so that there is proper monitoring of imports in terms of valuation, quality and classification.