Thursday Oct 08 2026

Loading... Today
wh

-- 0

Watch Live

Join Groups & Channels, No Spamming

logo

Overall Increase in Kraft Paper Prices Could Reach 35%; Industry Calls for 20% Box Price Increase, Voluntary Shutdown Proposed

The Pulp and Paper Times

The corrugated packaging industry in South India is facing severe financial pressure due to sharp increases in kraft paper prices, an inverted GST structure, and rising operational costs, according to the deliberations of the South India Corrugated Box Manufacturers Association (SICBMA) General Meeting held on October 6, 2026.

At the meeting, the managing committee and attending members discussed what they described as critical financial challenges threatening the survival of the corrugated packaging industry across South India.

Kraft paper prices have increased by 25% and above over the past few months, while mill alerts indicate that the overall increase could reach 35% in the coming months. According to SICBMA, the sharp rise in raw material costs is eliminating manufacturing margins and placing significant pressure on factory cash flows.

The association also highlighted the impact of the GST structure under GST 2.0. Kraft paper attracts 18% GST, while finished corrugated boxes are taxed at 5%, creating a 13% tax differential and resulting in the accumulation of Input Tax Credit (ITC).

While an ITC refund mechanism is available, SICBMA said practical delays in the process are leaving working capital blocked in the GST system. As a result, corrugated box manufacturers are increasingly dependent on high-interest market loans to sustain day-to-day operations.

The financial pressure is further compounded by increases in electricity tariffs, labour wages and fuel costs, adding to the overall cost burden on manufacturers.

Voluntary Production Shutdown Proposed

Following the deliberations, the General Body resolved to initiate a peaceful and democratic industry-wide expression of distress. Members have been requested to consider temporarily suspending corrugated box production on Friday, October 9, and Saturday, October 10, 2026.

Through the proposed collective action, SICBMA has appealed to customers to immediately accept a 25% price increase in corrugated boxes and ensure that outstanding payments are released within agreed credit terms to help ease the industry's working capital constraints.

The association has also appealed to the Government and concerned authorities to take immediate measures to address kraft paper price increases, correct the inverted GST structure and establish a permanent, fast-tracked mechanism for releasing accumulated ITC.

Participation Remains Voluntary

SICBMA clarified that participation in the proposed production shutdown on October 9 and 10 is entirely an individual business decision of each corrugated box manufacturer.

The association stated that no mandatory instruction or direction has been issued by SICBMA, its office bearers or the Managing Committee. Factory owners have been advised to assess their individual business circumstances, customer commitments and operational feasibility before deciding whether to participate.

SICBMA said it will continue to officially represent the industry's grievances before administrative authorities at all relevant levels.
 

Published at : Oct 08, 2026 07:02 AM (IST)
Total Views : 527

ad