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Rubber consumers have criticised the import duty hike on natural rubber, terming it as a retrograde step with long-term adverse impact on the entire rubber value chain.
Both All India Rubber Industries Association (AIRIA) and Automotive Tyre Manufacturers Association (ATMA) accounting for the bulk of natural rubber consumption in India stated that the decision was in total contravention to the Government’s avowed position of increasing manufacturing competitiveness in the rubber sector.
The Government, in a recent notification, had revised the import duty on natural rubber to 20 per cent or Rs 30 per kg from Rs 20 per kg earlier.
Niraj Thakkar, President, AIRIA, said that the step has been taken despite the industry urging the policy makers to look into high import duty structures on various raw materials including rubber compared to other rubber consuming countries.
The small-scale rubber manufacturers in India are already at the receiving end of large-scale import of cheap finished rubber products, he said
According to Raghupati Singhania, Vice Chairman, ATMA, a hefty increase in duty of Rs 10 per kg would significantly increase the raw material cost of the tyre industry and would add to the inflationary trends in the auto and transport sectors.
As such the tyre industry is witnessing lower offtake of tyres in view of slowdown in auto sector, the increase in import duty on principal raw material will make it tougher for the industry to manage the challenging environment, he said.
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