Small and medium rubber product manufacturers in India are feeling the negative impact of the sudden increase in imports and the high GST rate of 28% on most products even with the anti-dumping duty imposed by the government to protect large tyre companies.
The Directorate General of Anti-dumping & Allied Duties recently recommended levy of an anti-dumping duty of US$245-452 (Rs15,476-28,552) a tonne on truck and bus radial tyres imported from China.
The rubber industry manufactures over 35,000 rubber products, which are used across sectors such as automobile, defence, healthcare, agriculture and other niche areas.
Vikram Makar, Senior VP of All India Rubber Industries Association (AIRIA), said the growth in the industry has dwindled in the last three years and can be revived if proper policies are put in place. With the government opening up sourcing for most defence and infrastructure projects, it should ensure that the opportunity is not taken away by international companies, he said.
Vinod Patkotwar, CEO of Crown Rubber Products, said the collation of data on imports is a herculean task as many of the rubber products are clubbed with other items during import. For instance, he said conveyor belts used in the mining sector are imported 12-15% cheaper from China along with other implements.
Vishnu Bhimrajka, Director of Polmann India, said the government has not been able to implement tariff barriers to restrict import due to lack of proper data.
“I have received four calls in last three months from Chinese companies asking whether we are interested in a joint venture for setting up a unit in India as they feel the labour cost there is rising,” he added.
Though the association feels that the required data can come only from the government, it has appointed two full-time officers to collate data and liaise with the Government.
With annual revenue of Rs750 billion, the rubber products industry is dominated by the small-scale sector.