United Planters Association of Southern India (UPASI) today said that there should not be any reduction in import duty of Natural Rubber (NR), which is currently at 25 per cent.

Reacting to a reports in a section of the press, UPASI President Vinod Sivappa said that tyre manufacturers were seeking import duty reduction for NR and any such move will be detrimental to the interest of 1.2 million growers dependent on this agro industry and tantamount to fixing the final nail in the coffin.

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 said adding that be 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 many fold and reached 4,58,374 tonnes in 2015-16 and up to December 2016 the import was again higher by 1.34 thousand tonnes, he said adding that huge surge in imports had been a major factor for the crisis faced by the growers.

The reason sighted by the consuming industry for relaxation of import duty was on the background of the Rubber Board estimates on key variables such as production at 7.2 lakh tonnes vis-à-vis consumption at 10.6 lakh tonne for for the year 2018.

It may be noted that NR production compared to the previous years has reported a clear increase and 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 [2016-17] production is anticipated to rebound to the levels of 6.5 Lakh tonnes in 2016-17 and 7.2 lakh tonnes in 2017-18 is indeed a welcome development and it is anticipated that the production should improve and could meet the gap between consumption-production.

It is evident that the demand for reduction in import duty of NR has nothing to do with production deficit but is due to increase in the international prices of NR, Vinod said.

Domestic price is currently ruling at Rs.160 per kg. while, the international price is Rs.175.18 per kg and the call for reduction in import duty of NR, is nothing but a ploy to further depress the domestic prices.

It was proved that the international prices were invariably more volatile as evident from the recent increase in prices, which made domestic NR producing sector all the more relevant as it assured sustained supply of raw material and importantly with less volatility in prices.

That being the case, it is reiterated that there should not be any toying with import duty level for NR, he said.