With the CAROTAR Policy, Paper Imports may see a reduction of up to 15 percent

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Find the impact of CAROTAR Policy on import of Paper to India.

With the CAROTAR Policy, Paper Imports may see a reduction of up to 15 percent 

The government has come out with norms for the enforcement of 'rules of origin' provisions for allowing the preferential rate of customs duties on products imported under free trade agreements. The new norms have been framed with a view to checking inbound shipments of low-quality products and dumping of goods by a third country routed through an FTA partner country. Paper is one of the products that also come on a preferential rate from FTA partner countries. The Pulp and Paper Times checked out the possible ‘impact’ of new enforcement of ‘rule of Origin’ with Mr. Dipesh Laddha, Managing Partner at Kalpataru, Serving to customers’ varying paper needs with tailor-made solutions for the paper and packaging market in India and globally. Here is a small interview:

New Delhi | 1st September 2020 | The Pulp and Paper Times: 

Q: How will this ‘rule of origins’ benefit the Indian Paper Industry?

The Indian Paper Industry should welcome the Policy drafted in CAROTAR 2020. The primary aim of such a policy is to stop the unauthorized benefits and claims of Customs benefit under the respective Trade Agreements like FTA / PTA / CECA / CEPA). The quantity routed to India through Third Country sale had increased many folds in the last few years, resulting in unfair competition, and the Domestic Paper Industry has always hit due to this. In the Paper Industry among the countries eligible for FTA privilege – the significant imports are from Indonesia and followed by South Korea, Vietnam, and others contributing a small portion. However, the industry has witnessed the intrusion of Paper Products being routed through other countries and eventually increasing the competition with the local industry. Specifically, in the Wood Free & Coated Paper segment was the biggest hit. 

Q. Do you think that the Import of Paper under FTA, will get reduced due to this rule? If yes, why?

There will be a substantial reduction in the imports from the Third World countries who route the goods and take FTA benefits. The prices will no longer be competitive if they try to sell by paying the full duty applicable. The policy CAROTAR – verifying the Certificate of Origin of Goods will ensure that no infiltration of the other countries other than FTA takes the benefit of the privileges stated. However, the countries for whom the FTA benefits are applicable will not be any reduction of the quantities. We foresee the imports will increase across the board due to the disturbed equilibrium in demand & supply resulting from the pandemic 2020. 

Q. Dumping of Paper or goods by a third country routed through an FTA partner country will be curbed? Up to what extent?

During the last fiscal of 2019-2020, India has imported 1.60 Million tonnes of Paper out of Which its shown 0.30 Million Tonnes have originated from China. In contrast, the countries under FTA / CEPA and other schemes have contributed around 0.21 Million Tonnes with the 0 % Customs duty. With the CAROTAR policy, a reduction of up to 15 % of imports can be seen, routed through FTA Partner, and Originated by the third country. 

Q. Any other point you want to mention for this rule...

More than policies like CAROTAR, it is essential for the government to review the various Free Trade Agreement, which is applicable for Paper Industry. Recently, Govt of India has called data from us to fetch the list of the Paper Products which are being imported through Free Trade Agreements and, at the same time, if the same can be produced in India to encourage the motive of “AtmaNirbhar Bharat.” The government should seriously review the situation to stop the infiltration. The Trade Agreements are a direct threat for the Uncoated Wood Free Paper & Cut size Wood Free Paper Producers in India. Also, in the ongoing pandemic crises witnessed globally in the Paper Industry, the third countries or countries under FTA are ready to dump the goods at throwaway prices, which will impact the domestic paper producers financially, but will be beneficial to Paper Trade fraternity!


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