Paper stocks surged sharply on Monday after the government imposed a Minimum Import Price (MIP) on Virgin Multi-layer Paper Board (VPB), a move aimed at curbing cheaper imports and protecting domestic manufacturers. 

Shares of JK Paper Ltd. rose up to 15%, Emami Paper Mills Ltd. touched the 20% upper circuit, Tamil Nadu Newsprint And Papers Ltd. and West Coast Paper Mills Ltd. surged up to 13%, among others.

The Policy Trigger

The Directorate General of Foreign Trade (DGFT), introduced a MIP of ₹67,220 per metric tonne (CIF) on VPB imports. The measure will remain in force until March 31, 2026. Imports at or above the MIP continue to be permitted but require compulsory registration under the Paper Import Monitoring System (PIMS), while imports below the threshold are “restricted.” Import of stock lots remains prohibited.

Why It Matters for the Industry

VPB is widely used in packaging across pharmaceuticals, FMCG, electronics, cosmetics, liquor, and publishing. The imposition of a floor price prevents underpriced imports from disrupting the market, allowing Indian paper producers to compete on fairer terms. Domestic manufacturers, who had been under pressure from low-cost inflows, are expected to benefit from improved pricing power and margin stability.

The move comes against the backdrop of rising demand for packaging materials, especially with the festive season ahead, education-sector demand tied to NCERT textbook revisions, and steady consumption from FMCG and e-commerce. Raw material prices for paper companies have remained stable in recent months, and several producers are in the middle of capacity expansion. As per media reports, analysts expect the MIP, combined with these demand drivers, to provide a significant boost to industry earnings in the coming quarters.

Broader Outlook

The Indian Paper Manufacturers Association had earlier approached authorities seeking trade protection against imports of VPB from Indonesia. While the MIP does not amount to an anti-dumping duty, it effectively sets a baseline that shields local mills until March 2026. With capacity utilisation expected to rise and seasonal demand peaking in the second half of the fiscal year, the policy shift reinforces the growth trajectory for domestic paper makers.

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