Paper industry look for govt. support

Indian paper industry teeming with SMEs is currently going through a rough patch right now given the high input cost of raw materials. The industry is seeking government support to sail through the crises, informed Pramod Agarwal, President, Indian Agro & Recycled Paper Mills Association (IARPMA) at press conference in New Delhi.

Agarwal informed that the input cost of the industry has increased by more than 100 percent in the recent years. Significant increase in the cost has been witnessed in the case of waste-paper and Baggasee (wastage of sugarcane), two principal rawmaterials used in paper manufacturing.

Today, there are 700 units by and large comprising of small and medium enterprises involved in the manufacturing of paper, paperboards and newsprint in India. Of that 125 units have been closed. The industry today is worth RS.25,000 crore (USD 5.95 billion), which provides employment opportunities to around 1.3 million people directly and around 4 million people indirectly.

To meet the raw material requirements the company even imports wood pulp and waste paper. Presently, 50 percent of the total production is carried based on recycled or waste paper, 25 percent on agro-fiber and 25 percent based on food.

Moreover India imports more of waste paper as raw material. Surprisingly, India recycles only 30 percent of waste-paper, while US recycles 90 percent of waste-paper.

According to Agarwal the foremost issue is the imposition of Countervailing Duty (CVD) on imported waste-paper, which was currently increased from 8 percent to 10 percent. The excise duty on finished paper is 4 percent, the CVD which should be similar to excise duty is 10 percent, when it comes to waste paper which the industry cannot afford.

He has sought the Finance Ministry’s intervention too completely pull out CVD on waste paper to bring down the input cost of the industry.

Agarwal also informed that there’s zero custom duty on newsprint, while paper mills have to pay the custom duty on waste paper being imported for newsprint. He requested the government to correct the glitch in the larger interest of newspapers and other publications in the country.

He also said that industry needs government aid for technology up gradation, similar to the one available to the sectors like textile and jute.

Use of paper in India is very low as compared to other countries like US and China. In India it is only 9 kg per capita, while in US it is 250 to 300 kg per capita and China 40 kg per capita. So the government has to undertake proactive measures to promote paper consumption in India by kick starting campaigns like 'use paper, save nature," Agarwal signed off.