Indian Domestic Paper Producers Are Impacted Due To High Imports of Low Cost Paper from China

The raw materials price for paper production in China is far cheaper when compared to India. Hence, the finished product price is also lower. China, one of the major exporters to international markets, also serves Indian customers. Due to various subsidies, China can export its paper at a low cost to Indian market. This price is much lower than the Indian paper price and is attracting distributors and customers in domestic market to import huge volumes of paper. Within the last five years, the imports from China have almost doubled with $111 million in 2010-11 to $194 million in 2014-15. 

The nearly doubled imports from China had a negative impact on domestic paper manufactures in India. On the other hand, even though the cost of raw materials was increased in India the domestic manufacturers are unable to increase the paper price as they want customers to buy from them rather than importing from China. Major manufactures in India such as ITC paper and Ballarpur Industries have reported a decline in their profits in the FY15, even though India is one of the fast growing markets across the globe. 

Compared to June 2014, ITC Limited net sales were declined by 1.8% in June 2015. Whereas, Ballarpur Industries Limited had witnessed complete profit to loss (PTL), but the net sales were increased by 2.9% in June 2015 compared to previous year. The similar trend has been followed by the other major players in India such as T N Newsprint, JK Paper, Pudumjee Pulp and others. Availability of cheap paper from imports is beneficial to the distributors and customers in India but an intimidation to domestic manufacturers.

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