We compliment the Ministry of Forest & Environment, under the dynamic leadership of the new Minister, Shri Jairam Ramesh, for taking up the initiative to expand India�s forest cover from the present 21% to 33%.

According to the ministry�s latest estimates, out of the total 21 per cent forest cover area, 2 per cent is good quality and high density forest cover, 10 per cent is medium density forest cover and the remaining 9 per cent is degraded forest cover. The Hon. Minister has made it amply clear that the government�s main thrust is to regenerate the degraded forest area so as to increase the proportion of area under good quality forest cover.

The Paper industry has been pleading for such an initiative for many years now and heartily welcomes this move. Even in the absence of adequate enabling provisions, the Paper industry had already been instrumental in bringing more than 2.25 lac hectares of degraded and marginal lands of farmers under pulp wood plantations, through its Farm forestry and Social forestry initiatives. This has richly contributed to growth in the country�s forest cover, besides creating significant employment in the remote areas.

An independent CII study by a team of senior researchers drawn from University of Southern California, USA; Indian Institute of Management, Ahmedabad; Indian Institute of Forest Management, Bhopal; CREATE and World Bank has shown that a public-private partnership that entails wood-based industry getting access to a fraction of degraded land could help generate rural employment, increase green cover and make industry competitive globally. The analysis found that if 1.2 million hectares of degraded land is leased out to the industry, the total benefit works out to be well above Rs 10,500 crore per year.

The Paper Industry, as a responsible corporate citizen, once again pledges its full support to productive and environment friendly utilisation of the degraded forest lands and looks forward to active participation in this laudable move of the Government.

M. L. Pachisia

While India has certainly shaken off the downturn blues, certain sectors of the Indian economy are feeling the heat of excessive imports which could jeopardize the efforts of the government to revive the industry through a series of stimulus packages. India�s paper sector presents one such case scenario.

With economic slowdown and reduction in demand in the developed world, large paper manufacturing capacities in countries such as China, which have been traditional exporters to countries such as US, have become idle. Various varieties of paper are being shipped in large quantities to countries such as India which have shown lot of promise for growth.

There has been a significant spurt in coated paper imports in the country in the first quarter of current financial year. The coated paper imports in the first quarter have, in fact, gone up by as much as 70% when compared to the last quarter of 2008-09.

As against an import of 25097 MT in January-March quarter, the import of coated paper went up to 42971 MT in the April-June 2009 quarter.

Almost 50% of the import is taking place from China. The import of coated paper from China has gone up from 13345 MT in January-March 2009 quarter to 19165 MT in April-June 2009 period.

As is widely believed, export incentives by China have helped it make further inroads in India. The CIF price which was reigning at more than USD 800 per MT in January 2009 is being currently quoted at little more than USD 700 per MT leading to a surge in imports.

India is amongst the fastest growing paper markets in the world and despite economic slowdown, several perceptible key drivers of growth capable of propelling the Indian paper industry are still very much in place.

Paper industry in India is already being indirectly impacted by the large scale import of paper in the form of finished products i.e. books and periodicals. Printed matter worth Rs 3500 crore in the form of books and journals is being imported into the country at zero rates of duty affecting the paper industry as well as 1.5 lakh small and medium printers in the country.

The heavy import of paper puts in sharp relief the factors that continue to impact the cost competitiveness of the paper industry in India. Top most in the list is the woefully inadequate raw material availability. Industry has reiterated its demand for creation of a robust raw material base through implementation of Multi Stakeholders Partnership (MSP) model proposed by Ministry of Environment & Forests (MoEF). Easy raw material availability will increase competitiveness of the Indian industry enabling it to face the onslaught of unbridled imports effectively.

The growth in demand for paper is inevitable. The point to ponder is whether this growth will be met through large scale import of paper or through development of domestic industry. That a well developed domestic industry will add value to a long chain of ecological wealth creation, rural employment and greening India is only stating the obvious.

R Narayan Moorthy

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