Budget 2025: Print pins hopes on newsprint price reduction

Posted on 31st Jan 2025

industry leaders are also expecting the finance minister to lower import duties on raw materials, and improve CBC advertisement rates

CAA: Front pages of Indian newspapers focus on Donald Trump's visit even as Delhi burns

The winter session of the budget, scheduled for February 1, has once again sparked discussions in the print industry, with stakeholders hoping for crucial policy interventions.

Industry leaders are looking forward to financial relief in the form of reduced newsprint prices, lower import duties on raw materials, improved advertisement rates from the Central Bureau of Communication (CBC), and other government support to sustain and grow the sector.

Over the past few years, the print industry in India has faced mounting challenges, particularly due to rising costs of newsprint, which constitute nearly 50-60 per cent of total production expenses.

As per industry experts, the newsprint cost has risen by 7-8% in the recent quarters, crossing USD 600 per metric tonne. The cost was around USD 400 per metric tonne before the pandemic impacted the printing and publishing sector.

The introduction of a 5% customs duty on imported newsprint in the Union Budget of 2020-21 had further strained the financial viability of several publications, leading to closures and reduced print runs for smaller publishers.

Furthermore, the selling of space for advertisement in print media is leviable to GST of 5%. On the other hand, if the advertisement agency sells space for advertisement as an agent of the newspaper on commission basis, it would be liable to pay GST of 18% on the sale commission it receives from the newspaper.

Call for policy reforms

Rakesh Sharma, former President of the Indian Newspaper Society, highlighted that there was a requirement of 14 lakh metric tons of newsprint in the country, but our country produces only 7 lakh metric tons. Hence, the newsprint is to be bought from abroad, adding to the production cost.

“The government must have a very sympathetic and empathetic consideration for the industry which is already struggling with a lot of measures. The advertising is shrinking, the other cost of production is going up,” he added.

The annual report of Indian Newspaper Society 2023-24 even mentioned, “In its various representations, it has constantly been pointed out that indigenous newsprint manufacturers do not produce glazed newsprint and 40/42 GSM newsprint, besides there is a shortfall of approximately 0.7 mn tons of total newsprint consumption in India. Hence, there is no case for levy of Customs Duty on Newsprint.”

Manoj Singh, Vice President at Madison Media, emphasised that the government’s stance on raw material tariffs could directly influence the cost structure of the industry.

“Changes in import duties on raw materials like pulp and recycled paper could affect production costs. Any reduction in tariffs might benefit domestic manufacturers by lowering costs,” he noted.

As per Statista, in fiscal year 2024, the Wholesale Price Index (WPI) for pulp, paper, and paperboard was nearly 147.6, which increased by over 42% from the base year of 2012.

He also highlighted that the government could introduce financial incentives or subsidies to promote local production and decrease reliance on imported raw materials, ensuring greater price stability for the industry.

Meanwhile, Varghese Chandy, Vice President-Marketing & Advertising Sales of Malayala Manorama, outlined critical requirements that must be addressed in the upcoming budget to support the print media sector.

“Considering the current conditions of print media, it is essential that the government removes the import duty on newsprint, as it significantly adds to the financial burden of publishers. Additionally, there should be a complete exemption of GST on print advertisements, as it would provide much-needed relief to media houses struggling with declining revenues," Chandy mentioned.

As per him, another crucial step would be to increase the advertisement rates of the Central Bureau of Communication (CBC) for publications. For many newspapers, government advertisements form a substantial part of their revenue, and a revision in these rates is necessary to ensure sustainability in an era where digital media is rapidly gaining traction.

Chandy also expressed concerns over the decline in reading habits among students due to digital distractions and urged the government to implement initiatives promoting reading culture. “The government should take steps to encourage reading habits in students, as reduced engagement with print media is impacting literacy and comprehension skills.”

Sharma also said, “We have also requested the government that since there is no GST on the sale of the newspaper’s cover price, why have made GST applicable on the e-subscription? Technically, if the newspaper is free from GST for its sales, the GST on the e-newspaper shouldn't be levied either.

Way forward

In previous years, industry bodies such as the Indian Newspaper Society (INS) have consistently appealed for financial relief measures. In 2023, INS urged the government to remove import duties on newsprint, citing that India imports nearly 45-50% of its newsprint requirements due to inadequate domestic production. Additionally, CBC advertisement rates have remained stagnant for over a decade, further straining revenue streams for publishers reliant on government ads.

As the industry awaits Budget 2025, stakeholders are hopeful that the government will introduce measures to mitigate financial stress, ensuring that print media continues to play a vital role in informing and educating the public.

Whether these demands will be addressed remains to be seen, but a favorable budget could provide much-needed relief to an industry grappling with increasing costs and evolving consumer preferences.