New Delhi: Loopholes in India's import policy has caused nearly half of the country's over 100 newspaper mills to stop production, while the rest function at 60 percent of their potential capacity, the newsprint industry body said on Sunday.
"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 percent of their potential capacity," Indian Newsprint Manufacturers Association secretary general Vijay Kumar told IANS in a communication.
Warning that the permanent closure of all domestic newsprint mills is a serious threat, Kumar pointed out that newsprint is currently imported at under $500 per million tonnes which is $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.
India'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 said.
In this connection, the Indian Newspaper Society's previous president Ravindra Kumar has said that the health of Indian newspapers is also being undermined by rising costs, especially by the fall in the value of the rupee "that directly impacts our cost of production, since a large quantity of newsprint that we consume is still imported".