Manufacturers’ body wants amendment in Lincensing Note to stop third parties from importing newsprint

A meeting regarding the same was held among the representatives of Directorate General of Foreign Trade (DGFT), Department of Industrial Policy and Promotion (DIPP), Indian Newspapers Society (INS) and INMA in New Delhi on 11 August 2015. The meeting was held under the chairmanship of SM Khan, press registrar, Registrar of Newspapers for India (RNI).

 

At the meeting, representatives of the INMA said, “Though the legislative intent as emanating from the language of the Licensing Note is that the import is permitted to the registered newspaper publishers holding valid eligibility certificate issued on the basis of actual user condition by RNI on submission of necessary documentary evidence, authenticated by RNI to the satisfaction of the custom authority at the time of clearance of goods, a number of traders are importing consignments in their name under the bill of lading showing the traders as consignee, clearing their consignments in their names under bond bills of entry filed under Section 59 of the Custom Act, 1962 and warehouse the consignment for further sale.”

 

The representatives added, “By manipulating ambiguity in policy provisions, these traders have created a parallel industry with active involvement of the manufacturers abroad, which is adversely affecting the domestic newsprint manufacturing industry.”

 

In the meeting, INMA suggested the amendment in the Licensing Note by substituting words “at the time of clearance of goods” with the words “at the time of import of goods” to ensure level playing field for the domestic newsprint manufacturing industry.

 

INMA represents the newsprint industry in India and makes representations to the local and central authorities on matter related to trade and commerce of the newsprint industry. It has both large and small paper mills from private and public sectors from across the country as its members. 

 

“This import policy has led to the creation of a parallel industry, and has posed harsh setbacks to the formerly flourishing industry, causing nearly half of the 121 mills to stop production and the rest to function at 60% of their potential capacity,” Vijay Kumar, secretary general, INMA. 

 

Warning that the permanent closure of all domestic newsprint mills is a serious threat, Kumar pointed out that newsprint is currently imported at under USD 500 per million tonnes which is USD 100 less than both the selling cost within exporting countries and the cost of production in Indian mills.

 

“However, newsprint is classified as a restricted item and only actual users are permitted to import newsprint duty-free,” he said. “Third parties are taking undue advantage of a loophole in the import policy and its circulars that have created a safe passage for importing newsprint duty-free,” he added.

 

The country’s consumption of newsprint currently is around 2.7 million tonnes, while domestic mills can meet a demand of up to 2 million tonnes. 

 

Urging immediate government action in plugging the loophole in import of newsprint, Kumar said, “Allowing cheap imports to continue will not only result in loss of revenue, but will also lead to the unemployment of over one million people who are currently engaged in the newsprint industries."

 

The sale of imported newsprint in non-standard sizes and of low grammage, or paper density, by third parties poses yet another danger to the newsprint industry, he added.