Budget 2012: Paper Industry Requires Large Scale Investments, Says FICCI.

NEW DELHI: The paper industry is capital intensive and handicapped due to its outdated technology. Lack of funds is major hindrance for such a technology up-gradation. FICCI in its pre-budget memorandum has highlighted that the industry requires large scale investments to match up with the global standards of quality and scale. Hence it is necessary that the paper industry should also come under TUFs scheme.

FICCI in its pre-budget memorandum has also highlighted the following recommendations for the paper industry.

> The EU and US have imposed anti-dumping duties on Chinese coated paper thus resulting in excessive dumping of coated paper in India by China. This dumping has de-stabilized the market and resulted in considerable value erosion for industry. It is imperative to put an end to this dumping and protect the interests of the local industry through suitable duty measures. The process of imposing Safeguard duty and Dumping duty has to be quicker.

 > Wood is the primary source of fibre for pulp and paper industry. However the growth in wood plantations is not able to keep pace with the industry requirements. Higher MSPs for alternative crops have made wood plantations unattractive for farmers, hence the availability of wood is continuously depleting.

It is necessary that the current forestry/ agricultural laws in India are modified to give land on lease and permitted to have plantation on that lease land.

> The industry foresees a serious scarcity of raw materials in future and hence would have to increasingly depend on imports of wood/wood chips and pulp. However Indian ports do not have the necessary infrastructure for chips handling. Hence industry players have to import pulp from international market the prices of which are highly volatile. The infrastructure at the ports should be upgraded to handle wood and wood chips imports.

> The focus market scheme for exports should be expanded to cover the left out countries of Latin America and Africa.

> The industry should continue to get the benefits that it enjoys even now in terms of low level of duties/taxes both at the Centre and the States and thereby paper industry should be kept under special list of GST.

> In order to provide a level playing field to the domestic industry the Customs duty for import of Paper/Paperboards should be reviewed and this category kept in the Negative List (i.e., no preferential treatment) in bi-lateral and multi-lateral trade treaties and agreements.

> Customs Duty on Kraft Paper & Board falling under Central Excise Tariff Items 4804, 4805, 4810, 4811 etc. should be reduced to nil duty so that Kraft Paper & Board can be imported at competitive prices to make boxes of requisite quality at minimum cost and ultimately help promotion of exports from the country.

> Imported coal currently attracts customs duty of 5.15%. As a measure of relief to industry, it is recommended that the paper and paperboard industry be allowed to import coal at "Nil" rate of Customs Duty.

Source : articles.economictimes.indiatimes.com