Indian paper traders want reduction in the import duty on paper as part of the free trade agreements (FTAs) negotiated with other countries. | |
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| This contradicts the Indian paper industry's caution to the government against reduction of customs duties which are levied on import of machinery and equipment required for the sector, under free trade agreements (FTAs) with other countries. |
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| The basic customs duty on paper is presently 10 percent and India is negotiating FTAs with countries such as Indonesia, Thailand, Brazil, Chile, China, South Korea, the US, EU and Gulf countries, which are low-cost paper or pulp producers. |
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| Hence, the industry feels that any reduction in the duty structure would spell havoc for the paper industry. |
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| However, the paper traders tell a different story. |
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| According to Sushanta Dhar, president of Calcutta Paper Traders' Association, the reduction in import duties will help in meeting the shortage of paper in the country. |
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| Currently, the total domestic demand for paper is 7.2 million tonnes, while production is only 6.7 million tonnes. |
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| The gap between consumption and production has increased over a period of time. |
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| It is estimated that this gap may widen if adequate steps are not undertaken both by the industry and the Government to spur growth, Dhar said. |
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| Imports of paper have grown at over 19 per cent annually since 2001-02. |
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| In April-January 2006-07, imports grew 22 per cent over April-January 2005-06. |
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| Another issue of concern is the availability of raw material for both wood-based paper manufacturers and waste paper-based manufacturers. |
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| The raw material available in the country is not adequate to sustain the industry's growth rate of nine plus per cent. |
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| In the case of wood-based paper mills, the Government should permit industrial plantation on degraded forestlands, Dhar said. |
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| Currently, the Government does not allow forests to be used for sourcing woods by the corporate sector, nor does it permit industrial plantation on degraded forestlands. |
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| There is also a wide gap between the technologies of the domestic paper industry compared to that of the competing countries, he said. Most paper mills run on old technologies, which result in low productivity and high costs of production. Therefore, apart from the demand of a Technology Upgradation Fund from the entire industry, an incentivised technology flow from Europe with the help of fiscal concessions has also been sought, specifically in case of agro residue-based paper industry. |
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