Domestic paper manufacturers have expressed concern over a potential surge in imports following the exemption of Goods and Services Tax (GST) on uncoated paper used for exercise books and notebooks, stating that the move could severely undermine domestic competitiveness and increase production costs.

Under the revised GST structure, uncoated paper used for exercise books and notebooks has been exempted from GST, and the Integrated GST (IGST) on imports of such paper has also been reduced to nil. Indian Paper Manufacturers Association (IPMA) on Tuesday said that as a result of the change, foreign exporters will not pay IGST, while Indian manufacturers will be ineligible for input tax credit due to the exemption. This, it said, creates a sharp price differential that will make imported paper substantially cheaper than domestic production.

“India risks becoming a dumping ground for cheaper paper from abroad,” said IPMA president Pawan Agarwal. The association estimates production costs could rise by 3–5 per cent for notebooks and over 6 per cent for printed and textbooks.

“The Indian paper industry is already under pressure from predatory imports arriving at preferential or zero import duty. We urge the government to urgently review the policy,” said Agarwal.

Imports of paper have doubled over the past four years — from 1.08 million tonnes in FY21 to 2.06 mt in FY25.