New Delhi: Government has cut import duty on natural rubber to 7.5% for shipments up to 40,000 tonnes until 31 March, but fresh imports deals are unlikely as rubber remains cheaper in the local market.
The duty will be reinstated at whichever is the lower of 20% or Rs20 per kg after that date, a statement from the government on Thursday said.
The world’s fourth-largest producer of natural rubber has imported 143,468 tonnes in April-November, up just 3% on a year ago despite booming demand from the auto industry.
Tyre makers had been demanding the cut in natural rubber duty for over a year as they were struggling to pass on the rise in the raw material cost to end users.
But now despite trading at a record high rubber is cheaper in the local market and the import cut is unlikely to prompt them to sign fresh imports deals.
“I don’t think tyre companies will go for imports only because the government has cut the duty. There is no advantage in imports. Rubber is expensive in the international market,” George Valy, president of The Indian Rubber Dealers Federation, told Reuters.
On Thursday, the spot price of the most traded RSS-4 rubber (ribbed smoked sheet) was Rs20,750 ($460) per 100 kgs against Rs22,258 ($493) in Bangkok.
India imports natural rubber mainly from Thailand, Malaysia and Indonesia.
Indian tyre makers have stopped signing new natural rubber import deals as they are getting the raw material more than 15% cheaper in the local market.