MUMBAI, NOV 2:
The All-India Rubber Industries Association (AIRIA) has urged the Government to waive import duty on raw materials, particularly when domestic production is lagging behind demand.
Speaking at the National Rubber Conference here recently, Niraj Thakkar, AIRIA President, said that inadequate availability of natural rubber and higher import duty on raw materials compared to finished products (inverted duty structure) are affecting the competitiveness of the Rs 50,000-crore rubber industry.
Natural rubber production is projected to fall short of domestic consumption and securing raw material at competitive price will be the key challenge for the industry, he said.
The Government should reduce customs duty on raw materials such as PBR (poly butadiene rubber, used in tyre production), nylon tyre cord fabric and steel tyre cord.
It should also waive duty on raw materials such as butyl rubber and other hi-tech synthetic rubbers, EPDM (ethylene propylene diene monomer rubber) and polyester tyre cord that are not produced in the country, said AIRIA.
The industry has alleged that the surge of cheap imported rubber products from China and other countries has emerged as an area of concern.
Many of the finished rubber products are being imported at much lower duty than that is applied on raw materials.
With over 35,000 rubber products, it has become difficult to prove a case for dumping duty. As most of the manufacturers are small, they do not have the resources to initiate the anti-dumping proceedings according to the law, Thakkar said.
The import duty on latex was recently capped at Rs 49 for one kg from 70 per cent charged earlier.
However, latex being a wet form of natural rubber, the duty should be comparable to natural rubber which is 20 per cent or maximum Rs 20/kg, he said.
The levy of anti-dumping duty on carbon black and rubber chemicals, major raw materials for the industry, has made the Indian rubber products more expensive in comparison to imported finished products, said AIRIA.
Source: Business Line
