Concerns Rise in Indian Paper Industry Over GST Reforms
The Indian paper industry is worried about a potential flood of imports following recent GST changes. Leaders in the industry believe this could undermine the ‘Make in India’ initiative and diminish local competitiveness.
Pawan Agarwal, president of the Indian Paper Manufacturers Association (IPMA), warned that these reforms make India vulnerable to cheaper paper imports. He noted that while domestic makers face rising costs, imported paper for exercise books and notebooks will now come in without any tax. This could upset the balance in the market and hurt local producers.
In the last four years, paper imports to India have already more than doubled, growing by over 17% annually. Data from the Commerce Department shows that imports rose from 1.08 million tonnes in FY21 to 2.06 million tonnes in FY25, amounting to nearly ₹15,000 crore in total value.
The new GST rules exempt uncoated paper used for school supplies from taxes. This means foreign paper exporters won’t pay any Integrated GST (IGST). On the flip side, Indian manufacturers, now unable to claim input tax credits, will face higher production costs. This creates a significant price gap, making imported paper much cheaper than what local producers can offer.
As a result, the cost of making notebooks and textbooks is set to rise by 3-5% and over 6%, respectively. This increase will likely impact families and the education sector.
Experts are calling for a review of these reforms. A recent report showed that 70% of local manufacturers believe that without changes, they may struggle to survive in the competitive landscape.
Overall, industry leaders urge the government to consider the long-term effects of these tax reforms. Balancing foreign competition with local manufacturing is crucial for the future of the Indian paper industry.
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INDIAN PAPER INDUSTRY, PAPER IMPORTS, GST, GST REFORMS MAY TRIGGER SURGE IN PAPER IMPORTS, WARNS INDUSTRY BODY
