As demand from industrialised countries like the US starts drying up due global the economic slowdown, big paper manufacturers have started to dump their products in developing economies such as India. The domestic paper industry, estimated to be worth Rs 25,000 crore ($5.95 billion), has urged the government to impose anti-dumping duty in compliance with WTO norms, so that growth could be maintained during the next few years.
"We need some kind of safeguard duties immediately to protect it from cheap imports from abroad," Pradeep Dhobale, the outgoing president, Indian Paper Manufacturers Association (IPMA) told FE.
IPMA has asked the government to enhance the peak rate of basic custom duty from the current level of 10% to 15% on paper-paperboards, as an effective measure to prevent unbridled import and also re-introduce the component of special additional duty.
As per the IPMA figure, during 2002-07, while newsprint registered a growth of 13%, writing & printing, containerboard, cartonboard and others witnessed a growth of 5%, 11%, 9% and 1% respectively. "So far, the growth in the paper industry has mirrored the growth in the GDP of the country", Dhobale said.
According to IPMA, due to the global economic meltdown, the Asian paper market has become very vulnerable and major players in Indonesia and China are all set to push large quantities of coated and uncoated wood-free grades of paper into the Indian paper market. From 7.5 kg per capita consumption during 2007-08, the domestic consumption of paper is expected to go up to 8.3 kg during the current fiscal. While global average per capita consumption of paper is around 45 kg against the consumption to the tune of 300kg in the US.
"There is ample space for the paper producers, equipment and technology suppliers and more so for the trade players, to draw an effective strategy to chart aggressive growth," Dhobale, also chief executive of ITC's paperboard and specialty paper business, said.