India’s import duty on natural rubber increased to 25%, and this has displeased tyre manufacturers and the rubber industry, according to report.
The industry contends that the hike counters the government’s vision of Make in India, as the import duty on the finished rubber goods is merely 10%, which makes them cheaper then the ones manufactured in India.
A tyre manufacturer argues that the locally made tyres are facing stiff competition against tyres made in China, given the lower import duty on finished rubber goods.
According to The All India Rubber Industries Association (AIRIA), there are over 5,500 rubber units in the country especially in the Micro, Small and Medium (MSME) sector. The duty on import of natural rubber in India is among the highest in the world, and thus, the small scale sector is up against competing with cheaper import of rubber goods. The duty hike on natural rubber will add to the cost of production in India making it tougher for MSMEs to compete both in domestic and international markets.