KOCHI: The small and medium rubber units have demanded an increase in the import duties of finished rubber products to enable the local units to face the challenge of fast growing cheaper imports.
In a representation to Department of Industrial Policy & Promotion (DIPP) and Director General of Foreign Trade, the industry body All India Rubber Industries Association (AIRIA) said low import duties on finished have rendered Indian manufacturing of rubber products by SMEsuncompetitive in several product areas. There are about 5000 SME rubber units in the country accounting for the largest segment in SME clusters.
According to AIRIA, the import of finished rubber products has gone up by 100% in the last three years from Rs 3,810 crore to Rs 7,608 crore in 2012-13. Most of the import consists of low quality, low technology products.
The most disturbing aspect is that all raw materials for rubber industry attract higher rates of import duty than finished products. While finished goods can be imported at a duty of 2.5 to 10%, the import duty on all key raw materials ranges between 10 to 70 %,” said Niraj Thakkar, president of AIRIA.
Interestingly all rubber manufacturing countries have import duties on finished goods much higher than India to protect the interests of local units. Unless there is a strategic vision to ensure the growth of the rubber sector through appropriate policies aimed at both NR producing and consuming interests, India may soon lose the exalted status in rubber sector, he added.
Among the rubber SMES, the worst affected is the dipped rubber goods manufacturers especially balloon manufacturers who mainly depend on latex as raw material. With the import duty of 70% on latex, India has lost the competitive advantage of manufacturing dipped rubber goods, he said.
Source: India Times
