IPMA urges MoF to jack up paper import tariff to 15%

Written by Economy Bureau | Thiruvananthapuram | Updated: Dec 31 2008, 08:16am hrs
Peak rates of basic customs duty on import of paper and paper boards should be hiked from the current 10% to 15%, according to Indian paper industry. China has reportedly re-introduced export incentive recently, points out Indian Paper Manufacturers Association (IPMA).

In its pre-budget representation to the finance ministry, IPMA has also reiterated request to disband multiplicity in DEPB rates as an analogy to custom duty-rationalisation.

"In view of global 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," says R Narayan Moorthy, Secretary General, IPMA. After protests from global players, China had earlier withdrawn its export-incentive. Now this is reportedly re-introduced.

The representation to finance ministry cautions that the paper market is buzziing with news of impending imports of a large quantity of wood-free grades of paper in 70GSM. For this, sundry order-booking at a price of $680 per tonne and lower is already happening. The first lot of 5000 tonne is expected any time soon, says Moorty.

IPMA has also asked Centre to clamp a uniform DEPB rate of around 12% to all varieties of paper/paper boards.

The DEPB scheme is the only instrument of incentive utilised by the paper exporting units in India. There are quite a few export deterrents that curb export competitiveness of the Indian paper industry like low DEPB rate applicable to paper, paper boards and paper products besides high cost of raw material, according to the representation made to the government.

Precautionary measures like enhancing customs duty and imposition of safeguard duty is urgently called for to thwart unprideled imports. "Safeguard action is WTO compatible," says Moorthy. "Especially so by countries that face a situation of unprecedented imports fo a commodity that threatens to cause serious injury to domestic producers of directly competitive products," he adds.