Industry seeks national policy on rubber

It should be outlining medium-long term objectives, roadmap and recommendations, sectoral competitiveness

The rubber-based industry has sought a comprehensive National Rubber Policy on the lines of the auto sector. The policy should outline medium and long term objectives, roadmap and  recommendations and sectoral competitiveness among others, it said.

The Automotive Tyre Manufacturers Association (ATMA) had submitted the proposal, which is likely to come up for discussion in stakeholders’ consultations on May 9 at Kottayam.

For the last several years, domestic consumption of natural rubber has outstripped its availability. According to the Rubber Board, the gap between domestic production and consumption widened to 133,400 tonne in 2013-14. The rubber industry projects the production will lag behind the consumption by around 100,000 tonne in the current fiscal.

According to the ATMA, natural rubber imports are, therefore, imperative to meet the demand-supply mismatch and yet the industry continues to suffer from ‘inverted duty structure’.

Various trade agreements that India had signed with its neighbours have further aggravated the inverted duty structure of the industry.

Natural rubber (NR) is in the negative list in the trade agreements and hence not eligible for any concessional treatment in duty. For instance, under the Free Trade Agreement with Asean, tyres can be imported at six per cent duty but NR is in the negative list. Under the Indo-Sri Lanka agreement, tyres can be imported at zero duty but there is no duty concession on NR. Under India-Malaysia agreement also radial tyres can be imported at six per cent duty but NR is in the negative list.

“Policy makers need to consider that wherever the basic raw-material (like NR for rubber industry) is in the ‘negative list’ and not eligible for any concessional treatment in duty, the finished product should also be kept out of the concessional duty,” said Raghupati Singhania, vice chairman, ATMA.

He added the country also needs a ‘National Rubber Policy’ as rubber touches the lives of over 1 million growers.

Amitab Kant, secretary in the department of Industrial Policy and Promotion, announced that both inverted duty structure and inconsistencies in India’s FTAs were being seriously looked into by the two constituted committees. According to him, issues such as inverted duty structure undermine industry’s competitiveness.