SMALL and medium rubber manufacturers in India have demanded an increase in the import duties of finished rubber products to enable the local units to vie competitively with the fast growing cheaper imports.
There are about 5,000 SME rubber units in the country accounting for the largest segment in SME clusters. According to AIRIA, the import of finished rubber products has gone up by 100% in the last three years from Rs 3,810 crore to Rs 7,608 crore in 2012-13. Most of the import consists of low quality, low technology products. All raw materials for rubber industry attract higher rates of import duty than finished products. While finished goods can be imported at a duty of 2.5 to 10%, the import duty on all key raw materials ranges between 10 to 70%, according to AIRIA.
The imbalance in import duties for finished products against tariffs for raw materials are affecting mostly the rubber SMEs, particularly, ones who are engaged in dipped rubber goods manufacturers like latex-dependent balloon manufacturers.