Budget 2020: Print media players breathe sigh of relief with reduction of customs duty
Industry heads say the cut on customs duty on import of newsprint and light-weight coated paper will finally bring down the production costs
Thanks to Budget 2020 newspaper businesses are looking forward to sizeable reduction in costs. The industry is finally set to partially recover from the 10 per cent customs duty slapped on newsprint in the July Budget last year. The 5% reduction in custom duty on newsprints comes across as a respite for the industry that is already under pressure with unprecedented growth of digital media.
While there was no custom duty for the category before July 2019 those in newspaper businesses still welcome the move as it saves them anywhere between Rs1500 and Rs1700 per tonne of newsprint.
Newsprint prices have been going through an unstable phase in the last couple of years. In August 2017, the price of newsprint was around Rs 36,000 per tonne, a year later the price has reached around Rs 55,000 per tonne. It was only in 2019 when the industry got a ray of hope with prices showing some stability. The latest price of newsprints range anywhere between Rs 48000 and Rs50000.
Owners of print media businesses however never felt the impact of stabilizing prices. “The impact of the reduced prices was expected to be visible only in Q2 of 2020 because most of us in the business had inventory that would last us till the end of Q1 of 2019. Before we could benefit from the reduced prices we were slapped with a 10% custom duty. Slashing of the same by 50% finally gives us the opportunity to reduce production costs,” said the managing director of a renowned regional daily who didnt want to be named.
Budget 2020 comes across as a huge relief for the industry that has an annual demand of 2.5 million tones of newsprint. Even with high costs newspaper owners are forced to use imported newsprint as the local production in India is only about 1 million tonne annually. Most in business also complain about the poor quality of local produce that leads to wheel breakage, wastage and hence increases production costs.
No wonder newspaper businesses are all praises for Budget 2020. “We welcome the proposed reduction in customs duty on import of newsprint and light-weight coated paper. In recent years, the newspaper industry has been facing many headwinds and the environment has overall been very challenging. The 10% customs duty was introduced last year and that added to the burden. The reduction in customs duty would ease the burden and help the industry in this critical juncture,” said Karan Darda, Executive Director, Lokmat Media Group.
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