ASSOCHAM has urged the Centre to impose 10% customs duty on import of hardwood chemical pulp and bleached chemi-thermo mechanical pulp (BCTMP) to encourage domestic pulp production, provide fillip to job creation and promote overall economic development of India’s vast rural hinterland housing pulpwood plantations.
“These measures would help energise creation of sustainable sources of fibre required by Indian pulp and paper industry,” noted the ASSOCHAM pre-budget recommendations on indirect taxes submitted with the Union Government.
ASSOCHAM has also sought policy measures to be put in place to facilitate private sector participation in plantation development programmes.
It is estimated that more than 1.25 million metric tonnes (MMT) of pulp approximately valued at $710 million (about INR 4,600 crore) is imported into India each year.
Consequent to the customs duty exemption, annual pulp imports are expected to increase significantly in near future to the levels of $2 billion.
To produce the quantum of pulp imported in to the country currently, i.e., 1.25 MMT, more than 157 million trees are required. Basis the standard norms for conversion, production of pulp at this scale involves employment of about 33 million man-days – comprising about 31.8 million man-days in direct plantation farming and about 1.2 million man-days in production and ancillary services.
ASSOCHAM has justified customs duty exemption on import of soft wood pulp. “Considering that soft wood cannot be grown in India thus its requirement will have to be met through import route only.”