The Hindu Business Line : Tyre cos join issue with Upasi

Chennai April 17 Tyre companies have joined issue with the United Planters' Association of Southern India (Upasi) opposition to any change in import tariff on rubber.

"With customs duty of 10 per cent on tyre, the levy on natural rubber (20 per cent) is disaligned to Centre's principle of having lower duty on raw materials compared with finished products. On no other product is there such a glaring duty differential. The customs duty on cotton, which is an akin raw material to natural rubber, is only 10 per cent," said Mr D. Ravindran, Director-General, Automotive Tyre Manufacturers Association (ATMA). It is the apex body of tyre manufacturers in the country and duty on rubber imports is 20 per cent. The official pointed out that cotton and rubber were industrial products and small growers were involved in the production of both.

On Upasi's contention that import duty on rubber should not be changed since it involved over 10 lakh small growers, the ATMA official said, "If one agrees to such a premise, then duty cannot be reduced on any agricultural product."

Referring to the growers' association demand for parity with global prices, he said between 1997-98 and 2001-02, world prices were lower than domestic price. (See table)

"During October-December last year, again global prices were lower than domestic prices. Secondly, in no agricultural or manufactured product, there is such parity in prices. This is neither an economically viable proposition nor has the Government any instrument to ensure such parity in prices," he said.

To Upasi's view that domestic production was enough to meet the tyre sector's demand, Mr Ravindran said tyre manufacturers were forced to import as growers began to hold back their produce on hopes of getting a better price, thus, affecting availability in the market, he said.

Our correspondent reports from Kottayam: The Rubber Board Chairman, Mr Sajan Peter, in a statement, said the Centre had informed the board that no decision had been taken to import rubber from Thailand at a reduced tariff.

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