Tyre manufacturers demand reduction in rubber import duty

V. Sajeev Kumar Kochi | Updated on July 09, 2014

Tyre and rubber industries have denigrated the demand for curbing import of rubber as the same will bring rubber manufacturing to a grinding halt.

India is deficient in production of rubber. The gap between domestic production and consumption is widening and imports are inevitable. Moreover rubber imports are required for purposes of quality especially for manufacturing of new-generation truck and bus radial tyres, the industry said in a press statement.

M L Gupta, Senior Vice President All India Rubber Industries Association (AIRIA) said that rubber SMEs running into 5,000 units in the country are already facing a challenging economic environment.  Inverted duty continues to be an issue for the small manufacturers which is coming in the way of making them competitive. Any import curbs on rubber will make it all the more difficult for small scale sector to compete.  

According to Rajiv Budhraja, Director General, Automotive Tyre Manufacturers’ Association (ATMA), the rubber farming sector needs to be strengthened to meet the rising demand of rubber in the country. Supply side concerns need to be addressed. India’s rubber exports have dried up which need to be revitalised by equipping farmers to produce quality rubber.

Steps need to be taken to make Indian rubber farming globally competitive. Merely strangulating supply of rubber to the industry by curbing imports will be a retrograde step with long-term damages, he said.  

According to the industry, the justification for comparing current rubber prices with the peak prices during the year 2011-12 is unfair as prices doubled in a short duration of time and the steep price hike was more of an aberration.

The industry has claimed that rubber prices have increased by CAGR of 6 per cent over the last six years which is much higher than many other commodities. The current domestic prices are ruling 20 per cent higher than international prices.

Published on July 09, 2014

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