MUMBAI(Commodity Online): Inverted import duty structure and the FTAs signed by the India government has posed challenges to the rubber industry, according to All India Rubber Industries Association (AIRIA). In the last few years India witnessed a surge in the import of cheap, finished rubber goods owing to this government policy.
Between FY’09’ and FY’11’, India signed three major trade agreements with Association of South-East Asian Nations (ASEAN), Korea and Japan, respectively. Trade deficit in non-tyre rubber products with these three trading partners has gone up from Rs 651 crore in FY’09 to Rs 1,725 crore in FY 13′, a growth of 165 per cent in four years, showed a study of Ministry of Commerce data.
According to AIRIA, the finished products can be easily imported as import duty on rubber products is between 0 to 10 per cent, while duty on raw materials for rubber industry is between 5 per cent to 70 per cent.
A recent survey by the industry body showed that from 2,450 rubber products manufacturing units, supposed to be existing, 990 units, which 40 per cent, have closed down in states of Punjab, Maharashtra, Kerala and Tamil Nadu during last five years in view of cheap imports of rubber goods.
AIRIA has stated that the import duty on raw materials is highest in India as compared to neighbouring rubber product manufacturing countries. For instance, import duty on NR Latex is 70 per cent in India, while it is just 10 per cent in China. Similarly, in case of Synthetic Rubbers such as SBR and PBR, import duty is 7.5 per cent in China as against 10 per cent in India. India is deficit in both natural rubber and synthetic rubbers.
– Commodity Online
