Budget 2024: Paper industry pushes for 25% increase in import duty

In the run-up to the upcoming Budget, domestic paper and paperboard manufacturers are urging for a substantial increase in import duty to 25 percent on paper products. The Indian Paper Manufacturers Association (IPMA), in a statement on Monday, revealed that it has formally requested the government to raise the basic customs duty on the import of paper and paperboard from the existing 10 percent to 25 percent. The IPMA emphasized that India's WTO Bound rate for these products stands at 40 percent.

The association has further advocated for the implementation of quality control orders (QCOs) for various paper grades to ensure the availability of high-quality products in the Indian market and to curb the influx of substandard imports.

IPMA President Pawan Agarwal urged the government to categorize paper and paperboard under the negative list during the review of existing FTAs (ASEAN, South Korea, and Japan) and the formulation of new agreements. He highlighted that any increase in customs duty should not impact duty-free imports under existing FTAs.

Agarwal stressed the need for timely imposition of safeguard, anti-dumping, and countervailing duties on various paper grades, particularly following the recommendations of the Directorate General of Trade Remedies (DGTR).

With a substantial 43 percent increase in paper and paperboard imports in H1 of FY24, following a 25 percent increase in FY23 in volume terms, the Indian Paper Industry is calling for an adjustment in import duty in the upcoming Budget. This move is seen as crucial to creating a level playing field for domestic manufacturers, given the challenges posed by rising imports amid sufficient domestic production capacity.

The IPMA highlighted the strain on the paper industry, pointing to underutilization of capacity due to the surge in indiscriminate paper and paperboard imports. Despite having ample domestic production capacity, the industry is grappling with higher import growth rates, resulting in underutilization of the installed capacity within the country, according to IPMA President Pawan Agarwal.