Paragraphs should be offset from the rest of the text.

The left-indent is relative to the current placement, so we'll use an expression for 'start-indent'.

One way to do this:

<xsl:template match="h:p">
<fo:block space-before="3pt" space-after="3pt" 
          start-indent="body-start()+3pt">
  <xsl:apply-templates/>
</fo:block>
</xsl:template>