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Indian paper industry raised alarms as Chinese imports increase 14% in the last fiscal

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

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“Paper manufacturers in China and also ASEAN countries enjoy access to the cheap inputs and the raw material and also get incentives as well as subsidies in their countries. Allowing imports from those countries, at either nil or preferential import duties, into India does not provide a level-playing field to the Indian manufacturers in the domestic market,” as Indian Paper Manufacturers Association (i.e. IPMA) has pointed out in a letter to the Union ministry of commerce and industry as well. Imports should be allowed only on the basis of an actual usual license, the association said.
India’s import of the paper from China has been surged by around 14% to of 2,89,000 tonne in 2019-2020, as according to the latest data released by DGCIS as well. During the same period, total paper imports in India went up by 11% to 1.6 million tonnes.

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Paper Industry

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

“The compound annual growth rate (i.e. CAGR) in paper import to India in the last nine years (that between FY11 to FY20) is over around13%. This is one of the highest amongst all the sectors that have been affected by the surge in imports,” said AS Mehta, president, IPMA.
“This surge in imports is when India has adequate production capacity, which is currently under-utilized. Even large paper mills in India have been forced to shut down due to unavailability, causing job losses in thousands,” he told FE.

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

 

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