"there should be no tweaking with natural rubber import duty'

There should not be any tweaking of import duty of Natural Rubber, currently at 25 per cent or Rs 30, whichever is lower, United Planters Association of South India (UPASI) said here Tuesday.

Referring to reports in a section of the media that tyre manufacturers were seeking zero import duty on NR imports, UPASI President A E Joseph said in a statement that any such move would be detrimental to the interest of 13.1 lakh growers and 4.93 lakh workers dependent on this agro industry.

Importantly, it was a question of livelihood of rubber growers and the workers, vis--vis the profit margins of a few in the consuming sector, he said.

Joseph said NR (dry form) was the only plantation commodity where the bound rate was fixed at a very low level of 25 per cent.

The base duty of dry forms of NR in the base year (1986) under the WTO framework was 85 per cent (above the threshold level of 40 per cent) and hence should have been bound at 40 per cent according to the norms, he said.

The fixation of lower bound rates for the dominant dry forms of NR thus was not only regressive, but also an explicit violation of the standard norms fixed by the Government of India, he noted.

As such, there was no reason to reduce import duty, especially given the surge in NR imports during the last few years, with each year reporting new highs, he said.

For instance, the import of natural rubber in 2008-09 was 77,762 tonnes, which had increased to 5,82,351 tonnes in 2018-19.

The increased imports of NR and thereby un-remunerative prices resulted in producers not tapping, resulting in drop in production, he said, adding that if the situation was allowed to continue, it would make India fully dependent on foreign countries for this strategic raw material.

So it was absolutely essential to levy safeguard duty on Natural Rubber to protect the livelihood of small producers and in the national Interest by maintaining NR Production capacity, thereby reducing foreign exchange outgo (Foreign exchange outgo during 2018-19 was Rs. 6127.7 Crores], he said.

Any attempt to disturb the import duty structure will be counter-productive in augmenting the domestic production.

The case in point is the drastic decline in production from 9.13 lakh tonnes in 2012-13 to 5.62 lakh tonnes in 2015-16.

From these levels, this year's production increased to 6.48 lakh tonnes in 2018-19 and was expeced to further improve to 7.50 lakh tonnes in 2019-20, he said.

Joseph said there was a need to further increase NR production and efforts towards this should be given priority.