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13 Dec 2019, Edition - 1613, Friday

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Coimbatore

Do not tweak with natural rubber import duty: UPASI

Covai Post Network

Coimbatore : There should not be any tweaking with the import duty of natural rubber (NR), currently at 25 per cent or Rs 30 whichever is lower, United Planters Association of South India, said Tuesday.

Referring to reports appearing in a section of the press that tyre manufacturers were seeking nil import duty on NR imports, UPASI President, A E Joseph in a statement said that any such move to reduce the import duty will 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, he said..

NR [dry form] was the only plantation commodity wherein the bound rate was fixed at a very low level of 25 per cent and the base duty of dry forms of NR 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 according to the norms, he said.

The fixation of lower bound rates for the dominant dry forms of NR thus was not only regressive but also an explicit violation of the standard norms fixed by the Government of India, he noted.

Be that as it may, there is no reason whatsoever to reduce the import duty especially given the surge in imports of natural rubber into India during last few years, with each year reporting new highs.

For instance, the import of natural rubber in 2008-09 was 77,762 tonnes which had increased manifold and reached 5,82,351 tonnes in 2018-19.

The increased imports of NR and thereby un-remunerative prices resulted in producers not tapping resulting in drop in production, he said adding that the situation if allowed to continue, will make India fully dependent on foreign countries for this strategic raw material.

Thus it is absolutely essential to levy safeguard duty on Natural Rubber to protect the livelihood of small producers and protect National Interest of the country by maintaining its natural Rubber Production capacity Intact and thereby reducing the foreign exchange outgo [Foreign exchange outgo during 2018-19 was Rs 6127.7 Crores], Joseph said.

Any attempt to disturb the import duty structure will be counter-productive in augmenting the domestic production.

The case in point, is the 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 current year production increased to 6.48 Lakh 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 the NR production further and efforts towards this should be given priority, Joseph said

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