Rubber user industries push for duty reduction

The trade bodies representing rubber-based industries in the country have pressed for a reduction in the import duty of natural rubber (NR), to help bail out the industrial units struggling with the exorbitantly high prices.

These industries have been demanding a reduction in duty by 10 per cent, on a par with the import duty on rubber-based finished goods like tyre. At a hearing with the government-appointed panel, chaired by the Rubber Board chairman, they pointed to the need to be on an equal footing with Chinese manufacturers in accessing NR at cheaper global rates.

All-India Rubber Industries Association (AIRIA), Automotive Tyre Manufacturers’ Association (ATMA) and Indian Cycle and Rickshaw Tyre Manufacturers (ICRTMA), which together account for almost the entire rubber consumption in the country, took part in the hearing. The panel, appointed following a Delhi High Court order, is scheduled to submit its report by July 19.

According to Rajiv Budhraja, director general, ATMA, the domestic NR prices are ruling higher by Rs 30-40 a kg in the case of block rubber and Rs 20-25 a kg for sheet rubber above global prices. However, the local industry cannot benefit from the  low international prices in view of hefty import duty of 20 per cent, which at current prices comes to be around Rs 35 a kg.

China on the other hand has lowered the import duty drastically to 6.8 per cent. Chinese manufacturers are able to access natural rubber at much lower prices, and reduce their production cost whereas high production cost in view of exorbitant NR prices is eroding the cost competitiveness of Indian manufacturers.

Leading Indian tyre-makers have increased prices across all types of tyres three times this year, effecting a price increase of around 10-15 per cent. The price of benchmark grade RSS-4 rubber has increased 100 per cent in less than a year. The grade on Friday quoted Rs 184 a kg while the global price is Rs 153 a kg.