THE government’s proposed 70% import tax hike for natural rubber (NR) is nor welcomed by tyre and non-tyre manufactures in India. They allege that it will further harm the local manufacturing sector, conversely giving competitive edge to importers of finished goods, like China.
The proposed increase is from Rs 20 per kg to Rs 34 per kg.
The Automotive Tyre Manufacturers Association (ATMA) said, at current price of around Rs 157 per kg, the import duty of Rs 34 will translate to 21%, which is higher than basic duty on tyres of 10% and effective rate of duty of 8.6% from countries such as China, in view of trade agreements. The duty hike only enhances the inverted duty structure in the industry.
With the domestic production and consumption gap, the import of NR is inevitable, said ATMA. In the ptevious fiscal year, the gap was at 60,000 tonnes; in the current fiscal, production falls behind domestic consumption by 50,000 tonnes.
The All India Rubber Industries Association (AIRIA) also said that the proposed duty hike will nail the small and medium rubber enterprises .