KOCHI, INDIA(Commodity Online): India budget 2015-16 that will unfold on Saturday is expected to contain an announcement to hike the import duty on Rubber. But Rubber farmers and industry has locked horns over the issue of hiking the import duty.
Geofin commodities say considering the protests by the domestic growers against cheap import, the Finance Ministry is likely to increase the duty on natural rubber from the current 20 percent to 30 percent.
Since the international rubber prices dropping, imports to India has been increased several folds which forcing domestic prices to multi-year lows.
But rubber industry is against the demand to impose an increased duty on rubber imports. Mohinder Gupta, President, All India Rubber Industries Association (AIRIA) said India levies one of the highest duties on natural rubber and any move to increase duties will impact around 6,000 rubber units largely MSME’s.
The producers of natural rubber say that imports led to the price crash breaking their spine. Rubber consumers counter this by arguing that rise in imports have not hit the prospects of local farmers. They also say the imports have not put a dent on the conditions for domestic production.
The consumption during the month rose 0.8 percent on year to 84,000 tonnes, prompting tyre makers to increase imports by 11 percent to 30,441 tonnes, the board said in a statement. India imports natural rubber from Indonesia, Thailand, Vietnam and Malaysia.
Rubber farmers have been seeking a duty hike a of 75 per cent. Narendra Modi government’s budget on February 28 is likely to announce a decision favouring this demand. But a sharp increase in import duty is unlikely as government has to consider the prospects of the industry, especially the tyre makers.
– Commodity Online
