Indian paper industry calls for fair competition amidst surge in below-cost imports 

INDIA – The Indian Paper Manufacturers Association (IPMA) has raised alarms over a sharp increase in below-cost imports of virgin fibre paperboard (VFP) from countries like China and Chile, which it claims undermines local producers and threatens future investments. 

VFP, primarily used for packaging in the pharmaceutical, FMCG, and cosmetics sectors, has seen a significant surge in imports.

According to IPMA, monthly imports have more than tripled, rising from an average of 6,337 tonnes in 2021-22 to 21,233 tonnes in the first half of the 2024-25 fiscal year.

The issue intensified in August and September, with imports exceeding 30,000 tonnes per month, accounting for over 20% of total domestic demand. 

“The increasing flow of below-cost imports, especially from China and Chile, and the looming influx from Indonesia, which recently expanded its capacity by 1.2 million tonnes annually, are straining local producers,” IPMA highlighted in a recent statement. 

IPMA President Pawan Agarwal warned that the current scenario is jeopardizing profitability and return on investments for domestic manufacturers.

“The landed price of imported VFP is lower than the sales cost of local production, creating significant pressure on the industry,” Agarwal noted. 

Despite the VFP market’s potential growth from its current value of ₹10,000 crore (US$1.18bn) to an estimated ₹25,000 crore (US$2.96bn) by 2030, domestic players face hurdles in realizing this opportunity.

Agarwal emphasized that local companies have planned investments of ₹20,000 crore (US$2.37bn) to capitalize on this growth. However, these investments are now at risk due to market distortions caused by underpriced imports. 

To safeguard the industry’s future, IPMA is urging government intervention to establish a level playing field.

The association believes that strategic measures, including anti-dumping duties and import regulations, could protect local manufacturers from unfair competition. 

“The economic viability of domestic investments is severely impacted by the dumping of products at prices far below production costs,” Agarwal stressed. 

By addressing these concerns, the government can foster sustainable growth for India’s paper industry and ensure that local manufacturers remain competitive and resilient to global pressures.

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