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The United Planters Association of South India (UPASI) has opposed the tyre industry’s demand for zero import duty on natural rubber, saying that any attempt to disturb the import duty structure will be counter-productive in augmenting domestic production
There should not be any tweaking with the import duty on natural rubber, currently at 25 per cent or ₹30 whichever is lower, said AE Joseph, President, UPASI .
Reacting to reports of tyre manufacturers seeking zero duty on natural rubber imports, he said any such move to reduce the import duty would be detrimental to the interest of 13.1 lakh growers and 4.93 lakh workers dependent on this agro industry. Importantly, it is a question of livelihood of rubber growers and the workers vis-à-vis the profit margins of a few in the consuming sector. There was a drastic decline in the production from the level of 9.13 lakh tonnes in 2012-13 to 5.62 lakh tonnes in 2015-16. From these levels, the production increased to 6.48 lakhs tonnes in 2018-19 and it is anticipated to further improve to 7.50 lakh tonnes in 2019-20. There is a need to increase production further and efforts towards this should be given priority, he added.
Natural rubber [dry form] was the only plantation commodity wherein the bound rate was fixed at a very low level of 25 per cent. The base duty of dry forms of rubber in the base year [1986] under WTO framework was 85 per cent (above the threshold- level of 40 per cent) and hence should have been bound at 40 per cent, he said.
The fixation of lower bound rates for the dominant dry forms of rubber thus was not only regressive, but also an explicit violation of the standard norms fixed by the Government. That be as it may, there is no reason whatsoever to reduce the import duty especially given the surge in imports during last few years, with each year reporting new highs, Joseph said, Natural rubber imports in 2008-09 was 77,762 tonnes which had increased manifold and reached 5,82,351 tonnes in 2018-19.
According to UPASI, the increased imports and thereby un-remunerative prices resulted in producers not tapping, leading to drop in production. The situation, if allowed to continue, will make India fully dependent on foreign countries for this strategic raw material, it said, adding that it is absolutely essential to levy safeguard duty on natural rubber to protect the livelihood of small producers and maintain the country’s natural rubber production capacity intact, thereby reducing the foreign exchange outgo. The foreign exchange outgo during 2018-19 was ₹6,127.7 crore
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