The paper industry has welcomed the Budget announcement to do away with import duties on waste paper, but is disappointed on the lack of support not being extended for the main raw material wood pulp or protection from imports.
Mr Harsh Pati Singhania, Managing Director, JK Paper, while welcoming the move to do away with import duty on waste paper, said the industry had been hoping for a greater focus on growth. The hike in excise duty and service tax is poorly timed in the context of the increasing inflation. This would also mean there is little hope of interest rates coming down. All this would adversely impact manufacturing sector.
The paper industry has been seeing a decline in the last two quarters as margins have come under pressure. The hike in taxes will have to be passed on, he said. The industry is disappointed that import duties continue on wood pulp, the major raw material.
Mr N. Gopalaratnam, Chairman and Managing Director, Seshasayee Paper, said the manufacturers have no option but to pass on the increasing cost to the market. The industry cannot afford to absorb the impact of the increase in excise duty in the backdrop of the ‘poor profit taking.' There has been a hike in input costs across the board.
The cut in import duty for waste paper will benefit the non integrated manufacturers, he said.
Mr Pramod Agarwal, President, Indian Agro & Recycled Paper Mills Association, welcomed the nil duty on waste paper imports but regretted that the industry's demand for imposing custom duty on coated varieties of paper has not been considered favourably. The dumping from China and other countries is hurting domestic manufacturers.
Mr Madhukar Mishra, President, Indian Paper Manufacturers Association, the retention of import duty on paper imports is a positive step. But the industry is disappointed that import duty exemption has not been extended to key raw materials such as woodlogs, chips and pulp. If these had been exempted as has been done for waste paper imports, the competitiveness of the industry would have been enhanced, he said.