Domestic paper mills have sought a hike in basic customs duty on import of paper and paperboard to 25 per cent and have urged the Centre to review its free trade agreements.

Both under India-ASEAN FTA and India-Korea CEPA, import of paper in India is currently at nil rates of duty. Under Asia Pacific Trade Agreement, India has extended import tariff concessions to China and other countries and offered 30 per cent margin of preference, reducing the basic customs duty from 10 per cent to 7 per cent on most grades of paper, industry body Indian Paper Mills Association (Ipma) said on Wednesday.

In the last nine years, imports have risen at a compounded annual growth rate of 11.34 per cent in value terms (from Rs 3,411 crore in 2010-11 to Rs 8,972 crore in 2019-20), and 13.23 per cent in volume terms (from 0.54 million tonnes in 2010-11 to 1.64 million tonnes in 2019-20).

Ipma said that the import policy on paper should be changed from ‘Free’ to ‘Restricted’ to curb unfair practices such as under-invoicing, mis-declaration and dumping.

The association has also called for a Paper Import Monitoring System to check the dumping of paper.

“Imports at concessional/nil rates from low-cost producing countries is discouraging domestic investment in capacity expansion,” said A.S. Mehta, president of Ipma.