Paper industry seeks duty-free import of wood

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New Delhi | Published: November 28, 2014 12:33:56 AM

With domestic supply of wood and bamboo falling short of meeting the growing raw material requirement of the paper industry...

With domestic supply of wood and bamboo falling short of meeting the growing raw material requirement of the paper industry, the Indian Paper Manufacturers Association (IPMA) has asked the government to allow duty-free import of wood logs, chips and bamboo.
Currently, import of wood logs and chips attract total customs duty of 9.4% and bamboo attracts a duty of 36.1%.

According to IPMA, raw material demand for the paper industry is around 11 million tonne per annum and demand for wood is expected to rise to 15 million tonne by 2024-25. In 2013-14, about a million tonne of wood and bamboo was imported as domestic production was not able to match the raw material requirement. “With no dedicated enabling policy in the country for industrial plantation, the price of wood has gone up by more than 60% in 2013-14 and more than doubled in three years,” a statement by IPMA said.

At present, domestic paper production is estimated at the 11.38 million tonne, of which around 0.53 million tonne is exported. At the same time, domestic consumption of paper is about 13.10 million tonne, of which  around 2.25 million tonne is imported. “The domestic paper industry is at a significant disadvantage for it has no access to captive plantation to manage raw material cost, while global players have in-built advantage of conducive production plantation policies and ability to procure wood locally at favourable cost,” the industry body has written to the finance ministry.

The raw material, wood and pulp, constitutes 35-40% of the cost of paper production.

According to Rohit Pandit, secretary general, IPMA, the paper industry’s proposal for allocation of degraded forest land for growing pulpable wood has not made headway. “Industry driven ‘social-agro forestry’ falls short of meeting the growing requirements of wood and therefore imports have become inevitable,” he noted.

IPMA has also asked for an increase in peak rate of customs duty on import of paper and paper board as China is saddled with excess capacities as major markets such as US and the European Union have imposed anti-dumping duties on paper imports from Beijing.

The industry body has stated that China and other South east Asian countries  find India an attractive outlet for dumping excess inventory.
Per capita paper consumption in India is around 11 kg annually, while the global average is 56 kg. Domestic per capita paper consumption is projected to increase to at least 17 kg by 2024-25.

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