Demand for paper, paperboard and paper products is mainly for writing, packaging, newspapers and magazines. Domestic demand is growing at a CAGR of 5-7 % per annum. Export of paper from India is almost negligible.
Key Inputs
Wood, Bamboo, Jute, Straw, Agro residue like Bagasse, Power and Steam, Caustic Soda, Chlorine
Products
Newsprint, Cultural Paper, Industrial Paper - Kraft Paper, Paperboard, and Specialty Paper
Duty Structure
|
Excise |
Customs
(Basic) |
|
Year |
2000-01 |
2001-02 |
2000-01 |
2001-02 |
|
Products |
|
Newsprint |
Nil |
Nil |
5% |
5% |
|
Paper and
paperboard |
16% |
16% |
35% |
35% |
|
Inputs |
|
Mechanical wood
pulp |
Nil |
Nil |
5% |
5% |
|
Chemical wood
pulp |
Nil |
Nil |
5% |
5% |
|
Semi-chemical wood
pulp |
Nil |
Nil |
5% |
5% |
|
Pulp from other fibrous
cellulose material |
Nil |
Nil |
5% |
5% |
|
Other pulp |
16% |
16% |
5% |
5% |
* Basic Customs duty
Announcements made in previous year's budget
- Effective basic customs duty on grape guard paper used for packing grapes was raised to 5%. However, the item was exempted from Special Additional Duty.
- Basic central excise duty on corrugated boxes was increased to 16%. The exemption on corrugated paper or paperboard intended for the manufacture of corrugated boxes was withdrawn.
Industry's demands from Union Budget 2002-03
- Indian Agro and Recycled Paper Mills Association (IARPMA) has asked for an increase in customs duty on paper from 35% to 40%. This is also in line with WTO-bound rates.
- The Indian Paper Manufacturers Association (IPMA) and IARPMA have asked for an increase in the rate of customs duty on newsprint from 5% to 25%.
- IPMA has also asked for a reduction in excise duty from 16% to 8%.
- Customs duty on pigments and binders used in manufacture of paper should be reduced from 35 and 25% respectively to 15%.
- Complete excise duty exemption should be given for agro-based paper mills to enable them to compete with wood-based paper mills.
Key Players
Ballarpur Industries, West Coast Paper, ITC Bhadrachalam, Andhra Paper, Tamil Nadu Newsprint and Papers, Rama Newsprint, Nath Pulp, JK Corp, Vindhya Paper, Orient Paper, Seshasayee Paper.
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The Rediff Budget Special
The Rediff-Dun & Bradstreet Budget Analysis
Run-Up To The Budget
Money
Paper manufacturing is an energy, capital and water intensive process. Raw material cost accounts for 40-60% of the total cost of paper production.