The Hindu Business Line : Paper trade federation seeks cut in customs duty to 5 pc

CONTRARY to the suggestion given by the Indian Paper Manufacturers' Association (IPMA) that the customs duty on imported paper and paper products be increased from the current level of 35 per cent, the Federation of Paper Trade Associations of India (FPTAI), jointly with printers and corrugated box manufacturers, has urged the Union Government to consider reduction of duty from 35 per cent to five per cent in an effort to improve supply position in the domestic market.

The federation is perturbed over the manner in which large paper mills are creating an artificial shortage in the domestic market by increasing exports during the last couple of months. And taking advantage of the shortage situation, almost all the mills have not only revised the prices of paper a few times but are also lobbying for a customs duty hike so as to make imported paper costlier.

According to the federation, the domestic paper industry should not expect double benefits, ignoring the interest of consumers and traders. It is pointed out that the federation does not object to paper mills revising prices because it is up to market forces to decide whether such revisions can be absorbed. But the mills have to be held responsible for creating an artificial shortage, leading to price increases at regular intervals. This apart, large paper mills are justifying their demand for protection against imported paper. Hence the demand for the customs duty hike on imported paper.

Meanwhile, the federation has made a representation to IPMA urging it to advise its members not to ignore the domestic market. It is also taking up the matter with the authorities concerned with the Government, urging them to reduce the customs duty on imported paper in the event there is a further hike in paper prices by domestic mills.

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