Rubber imports: Planters decry easier port entry norms

Bitter pill: Farmers fear the lifting of restrictions may lead to an increase in the quantum of imports and result in a fall in already-low prices – REUTERS

KOCHI, JUNE 19

The Centre has eased port restrictions for rubber imports under the Advanced Authorisation Scheme (imports for export), wherein the entry ports designated earlier were only Nava Sheva (Mumbai) and Chennai.

Though the tyre industry hailed the decision, natural rubber growers, who are already reeling under a crisis triggered by the fall in prices, are apprehensive of the ramifications of such a measure. They fear that lifting of restrictions may lead to a further easing on imports, thereby increasing the quantum of imports and a resulting in a fall in prices.

Industry view

Rajiv Budhraja, Director General of the Automotive Tyre Manufacturers Association (ATMA), pointed out that the decision would certainly enhance India’s export competitiveness in rubber products. However, it only partly addresses the industry’s expectation on removal of port restrictions for all rubber imports.

The domestic rubber availability scenario is getting dimmer, he said, noting that the Rubber Board has projected a production-consumption gap of 4.7 lakh tonnes for the current fiscal. Therefore rubber imports are imperative for tyre plants to run.

Already the policy environment is highly restrictive, he added. The customs duty (on NR imports) is at 25 per cent, much higher than the rate of duty levied by any other rubber importing country. There are further challenges in accessing natural rubber. The tyre industry needs to adhere to pre-import conditions for rubber imports against (tyre) export obligations. Further, the export obligation period (for tyres) has been reduced from 18 months to only 6 months, making it tough for the industry, he added.

Farmers worried

Voicing concern, PC Cyriac, president of the Indian Farmers Movement (Infam), told BusinessLine that with this move, the government has denied protection to small rubber growers who produce 95 per cent of India’s rubber, in spite of repeated representations.

On the other hand, the government had extended safeguard duty or anti-dumping duty to the tyre industry as well as synthetic rubber industry to protect them from import competition. The government message was clear that it is not ready to support farmers, Cyriac said.

It is high time the government re-examined the quantity of rubber permitted to be imported duty free, as rubber consumption under the Advance Licensing Scheme is calculated in an unrealistic manner, he said.

According to Santhosh Kumar, Member, Upasi Rubber Committee, lifting of import restrictions would help only the tyre industry, which imports the bulk of natural rubber.

There are widespread apprehensions of improper infrastructure to check the quality of rubber being imported and the possibility of flooding of poor quality rubber from cheap South East Asia.

There is also a feeling that while growers await positive steps on the part of the government, the industry continues to get attention and support, while producing economy continues to suffer, he added.