The Hindu Business Line : Tyre firms want subsidy on rubber exports to go

THE domestic tyre manufacturers have shot off a letter to the Commerce Ministry, making a case for the discontinuation of export subsidy on natural rubber after March 2005. The Government had extended the subsidy for natural rubber exports till March 2005.

The Automotive Tyre Manufacturers' Association (ATMA), in its letter, has highlighted that subsidy for export of natural rubber was started in 2001 and that by March 2005, the subsidy would have been given for over four years.

The ATMA also pointed out that it had consistently taken the stand that export of all items should be encouraged and that Government help may be necessary in the initial stages of export of an item.

"In our reckoning, this (over four years) is more than sufficient initial period and, hence, there is no need for extending the subsidy beyond March 2005", the ATMA letter said.

Informed sources said ATMA's move to write a letter to the Ministry has been prompted by reports to the effect that the Kerala Government and certain natural rubber producers have approached the Ministry for continuing export subsidy beyond March 2005, enhancing the rate of subsidy and re-introduction of port restriction on import of natural rubber.

"Assuming that the reports are correct, we have written this letter to place our views before the Commerce Ministry on these three issues," a tyre industry official said.

On the issue of enhancing the rate of subsidy, the ATMA letter has held "when the international price has been ruling higher than the domestic price, where is the need to enhance the rate of subsidy".

The ATMA letter also highlighted that port restriction, export subsidy, etc. were introduced in the context of "somewhat lower domestic price" for natural rubber. "That is not the position any more", the letter added.

The total exports of natural rubber during 2003-04 stood at 75,905 tonnes in 2003-04 as against 55,311 tonnes in the previous year.

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