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Rubber crisis: India Govt refuses to ban import, raises customs duty

An executive committee of Rubber Board earlier in the month demanded complete ban on rubber imports and if that was not possible,a temporary ban on import against advance license. Rubber Board had suggested raisng imp..

NEW DELHI/KOTTAYAM (Commodity Online):┬áIndia Government has raised the basic customs duty on natural rubber imports in view of the crisis facing the plantation industry but still hasn’t heeded to the demand for a total import ban on rubber. It also falls short of the demand by Rubber Board to hike customs duty to 25%. Rubber prices fell sharply last month to Rs 15350 per 100 kg levels in the spot market before climbing back to Rs 156 levels in December.

The Ministry of Finance said in a notification that increased imports had casued a considerable fall in rubber prices in recent months.”To protect the interest of rubber growers, the basic customs duty on natural rubber has been increased from 20% or Rs 20 per kg, whichever is lower, to 20% or Rs 30 per kg, whichever is lower, vide notification No. 51/2013-Customs dated 20-12-2013. Over 12 lakh farmers who are dependent on this crop for their livelihood, are to be benefitted,” Ministry of Finance said.

An executive committee of Rubber Board earlier in the month demanded complete ban on rubber imports and if that was not possible,a temporary ban on import against advance license. Rubber Board had suggested raisng import duty to 25% without imposing any cap on the maximum limit.

The tyre industry has kept away from buying activities from domestic rubber market and this resulted in sharp drop in prices. Morever, automobile industry is also witnessing a slowdown causing demand for new vehicle tyres to decline, analysts said.

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