Centre has no plan to consider industry’s demand to lower import duty on rubber

  • The union commerce and industry ministry’s stand is aimed at protecting the interests of rubber farmers

Dhirendra Kumar
First Published11 Mar 2024
There are 1.3 million rubber growers in the country and Kerala accounts for a major chunk of the production. (Photo: Bloomberg)
There are 1.3 million rubber growers in the country and Kerala accounts for a major chunk of the production. (Photo: Bloomberg)

New Delhi: The Centre has no plan to consider the demands of the rubber lobby group to cut the import duty on rubber from existing 25℅ to 15%. The union commerce and industry ministry’s stand is seen as aimed at protecting the interests of rubber growing farmers.

India is largely dependent on imports from Vietnam, Malaysia, Indonesia, and other Southeast Asian nations, with the demand for lower import duty coming from the All India Rubber Industries Association (AIRIA).

There are 1.3 million rubber growers in the country, with Kerala accounting for the major chunk of the production at nearly 600,000 tonnes in 2022-23.

AIRIA is the apex body for rubber industries in India, representing small and medium businesses. It is commonly known as the non-tyre industry body.

AIRIA president Shashi Singh said, “We are facing a problem of rubber shortage due to lower production. Our requirement is around 1.35 million tonnes, but we are only able to produce about 830,000 tonnes. This deficit of around 500,000 tonnes has made the industry purely dependent on imports."

“The small and medium-scale domestic industry is affected by high duty and an inverted duty structure. Currently, we have to pay a duty of 25% or 30/kg, whichever is higher,” Singh said.

“We are requesting a duty cut to protect the small industries in India, and the inverted duty structure needs to be urgently addressed,” the AIRIA president said.

Explaining the need for restructuring the inverted duty, Singh said, “When we import raw material, the industry must pay more duty. Meanwhile, the duty on the import of finished products is just 10%. This huge gap is creating a significant problem for the domestic industry.”

However, a senior government official said, “The key objective of the government is to protect the interests of our farmers. For that, the government has increased the financial package for the rubber sector by 23% to 708.69 crore from 576.41 crore for the next two years.”

The incentive will enhance natural rubber production and productivity and reduce import dependency in the future.

The funds will be used for supporting the plantation of rubber, generation of planting material, productivity enhancement, formation of rubber producers' societies, and rubber research and training.

The production of natural rubber would be increased through expanding planted area, accelerating rubber plantation development programmes in non-traditional regions, including the Northeast.

Under the scheme, planting materials worth 50,000 per hectare will be supplied to rubber growers by the Rubber Board. And this assistance will be in addition to the ongoing plantation being carried out in 200,000 hectares under the Indian Natural Rubber Organisation for Assisted Development (INROAD) project in the Northeast.

Queries sent to commerce secretary and commerce ministry spokesperson remained unanswered till press time.

 

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