Rubber and tyre industry bodies call for duty-free import of NR

Natural rubber (NR) consuming industries have urged the Union government to allow duty free import of 200,000 tonnes of rubber on Tariff Rate Quota (TRQ) basis and 5,000 tonnes of latex in this financial year in order to bridge the gap between domestic supply and demand. 

The All-India Rubber Industries Association (AIRIA) and Automotive Tyre Manufacturers Association (ATMA) stated that the growing deficit between domestic production and consumption of NR is a serious concern and free import is the key to this serious issue in the short run.

Vinod Simon, president, AIRIA, and Rajiv Budhraja, director general, ATMA, have said that in the last four financial years, NR production had increased only 1 per cent, while the consumption increased more than 15 per cent. In the current financial year, according to industry estimates, the domestic consumption is likely to lag behind domestic production by 189,000 tonnes.

In view of the fact that new capacities and major expansion plans undertaken by tyre companies to cater to booming automobile industry will lead to an increase in consumption by 150,000 tonnes in this fiscal.

As per the Rubber Board estimates, the total consumption in 2011-12 would be 977,000 tonnes, up 40,000 tonnes compared to last financial year.

Refuting this projection AIRIA and ATMA said that by the end of this fiscal, consumption would be 10,80,000 tonnes, up 150,000 tonnes, leading to a gap of 189,000 tonnes in the local supply and demand. But the board projects a shortage of 75,000 tonnes only.

Budhraja added that in view of the widening gap between supply and demand coupled with growth in tyre demand, a rise in voulme of imports of finished products is likely not withstanding adequate domestic capacity. As a result, value addition from NR to finished products, particularly tyres, will take place outside the country, especially in China. Import of truck and bus tyres in 2010-11 increased to 19,63,815 from 13,62,010 in the previous finanacial year. Likewise, import of car and motor cycle tyres increased to 957,000 from 310,000.