The Hindu Business Line : Centre urged to cut rubber customs duty

High natural rubber prices coupled with the inverted duty structure has made the rubber-based industry's profit margin very negligible and if the situation continues such units would turn sick in the future, according to Mr N. Sreekumar, President, Cochin Chamber of Commerce and Industry.

A solution to the crisis is to bring down the import duty on natural rubber to below that of finished products, Mr N Sreekumar told Business Line. He said the import duty on finished rubber products currently was 12.5 per cent whereas for natural rubber it was 20 per cent.

This situation had resulted in the indigenous products being less competitive in the domestic market. Mr Sreekumar, who is also the Head, Kerala operations of the Apollo Tyres Limited, said the manufacturing cost in countries such as China and Thailand was less, as power, finance and labour were cheap.

IMPORTS PROBLEMATIC

Since the international prices of natural rubber were high, imports of the raw material would not be possible, he said.

The situation had reached such a stage that "rubber-based industries are just surviving and their profit margin is very negligible," he said.

The growth in economy and its cascading effect on the demand for automobiles had helped the tyre industry to just operate at a low profitability of one to two per cent, he said.

More Stories on : Rubber | Excise and Customs

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page