KOCHI: Alleging substantial increase in import and dumping of finished rubber goods in India, rubber MSMEs have asked for increase in import duty on finished rubber goods to 30 per cent. Currently the import duty on rubber manufactured products ranges between nil to 10 per cent.
Finished products made from natural rubber are imported at nil rate of duty from Asian countries like China.
According to All India Rubber Industries Association (AIRIA), overall import of rubber products in India has gone up 120 per cent from Rs 4,180 crore to Rs 9,202 crore in four years to 2015-16.
“India levies amongst the highest duties on import of raw materials and one of the lowest duties on import of finished rubber goods. This inverted duty structure is leading to a surge in import of finished goods. Of the total import of finished goods, as much as 80-90 per cent is avoidable as domestic rubber manufacturing units have capabilities to meet the demand but low import duties on rubber products especially under FTAs has led to indiscriminate imports in the country”, said Kamal K Chowdhury, president AIRIA.
According to AIRIA, the finished products can be easily imported as the import duty on rubber products is between 0 and10 per cent, while the duty on raw materials for rubber industry is between 5 per cent and 70 per cent. Not only import duty on raw materials is higher, the duty is levied even on those raw materials which are not produced in the country thereby increasing the cost of production in India.
Finished products made from natural rubber are imported at nil rate of duty from Asian countries like China, Sri Lanka etc whereas Natural Rubber is imported at 25 per cent or Rs.30/kg whichever is lower. Balloons, Gloves & Dipped products made from Latex Rubber are imported at 8 per cent duty from Asian countries like China, Sri Lanka etc whereas Latex Rubber is imported at 70 per cent, AIRIA has stated.
Even when compared to other rubber consuming nations, import duty on finished rubber goods is lowest in India facilitating import of goods to India. For instance on tubes, pipes and hoses, the import duty in China is 10 per cent and above, in India, these can be imported at 6 per cent. Rubber rice de-husking rolls, widely used in rice mills across the country, can be imported duty free in India while China employs up to 80 per cent duty on the same.
