Indian Paper Industry has invested Rs. 25,000 crore over the last decade in modernization and capacity expansion programme. They have expected India to be the fastest growing paper market with growth rate of 5-6%. However, the fastest growth rate has attracted competition especially from China and other south east Asian countries which resulted in high imports, which have been growing at a compounded rate of 21% over the last 5 years. Imports from Asean market enjoy basic customs duty on paper is nil under the Indo-Asean Free Trade Agreement. Apart from imports, Indian paper industry is also facing challenges in rising raw material costs, where mill-delivered wood costs $175-200 a tonne in India against an average of $100 a tonne in other Asian countries.
To overcome the above, the industry has been representing to the government for intervention to check imports with a safeguard duty or special additional duty, especially against Asean players,