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Alleging a substantial increase in import and dumping of finished rubber goods in India, rubber MSMEs have asked for increase in import duty on finished rubber goods to 30 per cent. Currently, the import duty on rubber manufactured products ranges between nil to 10 per cent.
According to the All India Rubber Industries’ Association (AIRIA), the overall import of rubber products in India has gone up 120 per cent from ₹4,180 crore to ₹9,202 crore in four years between 2011-12 and 2015-16.
“India levies amongst the highest duties on import of raw materials and one of the lowest duties on import of finished rubber goods. This inverted duty structure is leading to a surge in import of finished goods. Of the total import of finished goods, as much as 80-90 per cent is avoidable as domestic rubber manufacturing units have capabilities to meet the demand but low import duties on rubber products, especially under FTAs, has led to indiscriminate imports,” said Kamal K Chowdhury, president AIRIA.
According to the association, the finished products can be easily imported as the import duty on rubber products is between 0 to 10 per cent, while the duty on raw materials for the rubber industry is between 5 and 70 per cent. Not only is the import duty on raw materials higher, duty is also levied on raw materials which are not produced in the country, thereby, increasing the cost of production in India. If the idea is domestic value addition, this anomaly of inverted duty needs to be corrected.
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