On August 1, 2008 in Delhi, the newly formed Indian Carton Manufacturers Association (ICMA) together with the All India Federation of Master Printers made a strong appeal to the Ministry of Commerce for rationalization of the import and excise duties payable on import of raw materials such as paper and paperboard. At a jointly organized press conference the two associations asserted that domestic board and paper mills have periodically increased their prices and have not passed on any of the 4 per cent excise reduction on printing and writing papers announced in the last union budget. The import duty on paper and board in spite of a slight reduction is still at a very high rate of 28.64 per cent.

Mr R.N. Duttah Baruah, President, All India Federation of Master Printers alleged that paper prices had increased in July, August and December 2007, and again four times in the last four months with yet another increase imminent. This is in contrast to the usual once a year increase in recent years. Newsprint prices have also doubled which is affecting newspaper readership in the country. Dutta Baruah asserted, “Print and packaging manufacturers are suffering as they are intermediaries between their suppliers and customers. Demand for printed paperboard products is showing a decline as a result of these indiscriminate increases.”

Mrs Amila Singhvi, President, ICMA, emphasized the importance of packaging – “Packaging is half the sale,” which should make it an extremely important industry with the retail boom in the country. However, she felt the industry is being sidelined. The prices of raw materials in the industry are not transparent and the increase in prices is untimely. She said, “Repeated and indiscriminate hikes in cost of raw materials such as board and kraft wreak havoc with our pricing and delivery schedules. Frequent changes in price result in losses for packaging companies as our customers take time to react to increases, while board and paper manufacturers increase prices immediately post-announcement.” As a solution she added, “If price rise is inevitable, a mechanism should be worked out whereby adequate notice be given of an impending price hike, as well as honouring previously quoted prices for an agreed upon length of time. Mills must make a formal intimation to FMCG end-users to ensure that carton manufacturers are able to get similar price increases from their customers.”

Mr Vinod Jain, Chairman, government relations AIFMP, in his presentation emphasised the importance of the print industry to the economy and why the ministry of commerce should focus on its needs. Apart from literacy, education, technology and employment issues, he said that the current growth rate of the industry in India is 12 per cent and it can achieve 60 per cent growth by 2012 if the government intervenes and resolves the sharp increase in paper prices in recent months. Mr S.C Sethi, President of the publishers' association expressed his concern of dipping book sales and demand due to the increase in paper price. He spoke of declining sales in regional language books and recommended a zero import duty on printing and writing paper.

See also our editorial -- Yes minister! Wake up minister!
http://www.indianprinterpublisher.com/digital-print/2008/The-budget.html

Salient demands of the Paperboard Packaging Industry:

1. Reduction in excise duty on folding paperboard cartons and corrugated cartons to 8 per cent from the current level of 14 per cent to match the rate of excise duty on Board
2. Reduction in import duty from the current approximately 30 per cent to create a level playing field with international publishers, printers, and converters
3. End to cartelisation by paper mills
4. End to unregulated and indiscriminate price hikes by paper mills.
5. Adequate pricing mechanism and schedule to be put in place so that increases in prices of raw materials are passed on to end-users.