The Centre has no plans of imposing a ban on import of natural rubber or increase import duties further despite strong demands made by the rubber-growing states of Kerala and Karnataka.
The Commerce Ministry will not recommend any further measures to check imports as the interests of rubber growers had already been taken care of by the import duty hike in May, a government official told BusinessLine.
Senior representatives from Kerala recently met officials in the Commerce Ministry while Dakshina Kannada MP Nalin Kumar Kateel gave a representation to Commerce Minister Nirmala Sitharaman demanding a ban.
“Both States say that domestic rubber prices are down because of high imports. This is not the real situation. We have already acted once on their demand by increasing duties. There is no room for further increase,” the official said.
The government had increased import duties on natural rubber to 25 per cent from 20 per cent in May this year. The demand now from rubber growers is that either import should be banned or a higher duty of 40 per cent or more should be imposed.
The Centre’s contention is that the variety of rubber, called block rubber, that is mostly imported into the country is not produced in required quantities domestically. Block rubber is inferior in quality and cheaper than the RSS-4 variety produced in the country and is mostly used by tyre manufacturers who do not need very high quality rubber. “It is not fair to force tyre manufacturers to buy the superior variety of rubber that they don’t need by banning imports of the other variety,” the official said.
Tyre manufacturers had protested against the government’s decision to increase import duties on natural rubber in May claiming that it led to an inverted duty structure where the import duties on the finished product (tyres) was much lower than that on the raw material.
Low international and domestic rubber prices, resulted in rubber production falling to 6,55,000 tonnes, down 15 per cent compared to the previous year. Consumption increased by about 4 per cent to 10,18185 tonnes, according to government figures.
Rubber imports during the year touched a record 414,606 tonnes – up 15 per cent compared to imports in 2013-14.
