India’s paper imports more than double in four years to 2.05 million tonne, posing challenges for local players: IPMA

 

Indian paper industry in crisis: Only 550 of 900 mills operational

• The Indian paper industry is facing a downturn, with closures and operational disruptions reported across the country. 
  
• Recent data indicates that around 550 of the nation's 850-900 paper mills are operational, according to the Indian Paper Manufacturers Association (IPMA). This decline is attributed to a combination of factors, including raw material scarcity, increased import competition, and economic pressures.
• The Gujarat Paper Mills Association (GPMA) revealed that over 20 mills shut down in the six months leading up to mid-2023. 
• This impacted industrial areas like Morbi, Ahmedabad, Surat, and Vapi. Meanwhile, North India witnessed significant disruptions, with kraft paper mills temporarily halting production due to reduced demand. 
• As per a senior paper industry expert, "The industry's reliance on imported wood chips and waste paper, coupled with a low domestic waste paper recovery rate, has further strained operations. Duty-free imports under free trade agreements have intensified competition, making it difficult for domestic mills, especially smaller ones, to remain viable."
• Other challenges extend to waste paper suppliers experiencing price drops and inefficiencies in the collection system. Sustainability efforts, while necessary, have added operational costs, further squeezing profit margins. 
• Meanwhile, paper mills in the Northeast are operating at reduced capacity due to raw material shortages, while in Gujarat, reduced exports and local demand have led to operational difficulties, reflecting a broader crisis in the Indian paper industry.
• As per data released by the Directorate General of Commercial Intelligence and Statistics, paper imports reached 19.3-lakh tonnes in FY 2023-24, a rise of 34% over 14.3-lakh tonnes imported in the previous year. 
• The surge of 34% comes on top of a 25% jump in paper imports in the previous year, FY 2022-23. 
• The Association of Southeast Asian Nations (ASEAN) has come to account for the largest chunk in the import pie in the country, accounting for a 27% share.
• As per IPMA, the paper imports from ASEAN, which enter the country at zero import duty under the ASEAN-India free trade agreement, doubled to 5.1-lakh tonnes during the year from 2.7-lakh tonnes in FY 2022-23. 
• In value terms, paper imports have doubled in the last three years. 
• From INR 6,140-crore in FY 2020-21, the figure has notched up to INR 13,248-crore in FY 2023-24, the highest ever level, with a three-year compound annual growth rate of 29%.

India’s paper imports more than double in four years to 2.05 million tonne, posing challenges for local players: IPMA

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• Paper and paperboard imports reached a record 2.05 million tonne in 2024-25 with a 33 per cent jump in volume from China, the Indian Paper Manufacturers Association (IPMA) said  while expressing concerns over growing shipments.
  
• Urge the government to implement stricter quality control measures, review trade agreements that lead to duty-free or low-duty access for paper imports, undertake trade remedial measures, and ensure a level playing field for the Indian paper industry
• Imports have made most small and medium paper mills in India commercially unviable. 
• According to Department for Promotion of Industry & Internal Trade (DPIIT), out of over 850-900 paper mills in the country, only 550 are operational
• The relentless surge in paper imports is a matter of grave concern for the domestic paper industry, which has invested substantially in capacity building and sustainability initiatives
• Imports from China now account for 27 per cent of the total paper and paperboard imports into India, and the ASEAN bloc accounts for 20 per cent of the total imports, the IPMA said.
• Citing the Commerce Ministry data, the IPMA said paper and paperboard imports surged more than twofold in the past four years to hit 2.05 million tonne in FY25 from 1.08 million tonne in FY21.

Paper industry voices concern as imports rise 34% in FY24 

• As per the data released by DGCI&S, paper imports reached 19.3 lakh tonnes in FY24, a rise of 34 per cent over 14.3 lakh tonnes imported in the previous year

• Indian Paper Manufacturers Association has voiced concern at consistently high levels of imports of paper and paperboard in the country which is hurting the interests of domestic industry.

• ASEAN has come to account for the largest chunk in the import pie in the country accounting for 27 per cent share. Paper imports from ASEAN, which enter the country at zero import duty under the ASEAN-India free trade agreement, doubled to 5.1 lakh tonnes during the year from 2.7 lakh tonnes in FY23.

• In value terms, paper imports have doubled in the last three years. From ₹6,140 crore in FY21, the figure reached ₹13,248 crore in FY24, the highest ever level, with a 3-year CAGR of 29 per cent.

• Despite India’s sufficient domestic capacity to produce nearly all grades of paper, the influx of indiscriminate imports is undermining the commercial viability of many paper mills across the country. 

• Government data reveals that out of over 900 paper mills in India, only 553 are currently operational, a clear indication of the adverse impact of these imports, said Pawan Agarwal, President, IPMA

• IPMA has urged the government to increase the basic customs duty (BCD) on import of paper and paperboard from 10 to 25 per cent (WTO bound rate for India is 40 per cent).

• He stressed the importance of imposing suitable safeguard, anti-dumping, and countervailing duties on imported paper grades, following the recommendations of the Directorate General of Trade Remedies (DGTR).

• Rohit Pandit, IPMA Secretary General, emphasised the need for issuing Quality Control Orders (QCOs) for various paper grades to guarantee the supply of high-quality products to Indian consumers and to prevent the import of sub-standard paper.