THE All India Rubber Industries Association (AIRIA), in its pre-budget representation, has appealed that customs duty on natural rubber (NR) be reduced to 7.5% or Rs10/kg from the current 20% or Rs20/kg, whichever is lower.
The industry depends on NR as raw material, accounting for 35-45% of the raw material cost.
The prevailing international price of NR is at Rs160/kg, whilst the import duty is at Rs20 or about 12.5%, which is higher than the 10% import duty for finished products.
“China has just reduced the import duty on natural rubber from a maximum of CNY1,600 to a maximum of CNY1,200 effective January 2013, ” the Association said.
Its president, Niraj Thakkar, said, “At the current international prices of around CNY25,000 a tonne, the import duty comes to just about 5%. The Indian industry needs a level playing field to be competitive, ” adding that since import duty for raw materials is at 20-70%, the cost of finished goods made from these imported raw materials will also increase, hard-hitting the domestic manufacturers , mostly the small and medium enterprises.
It has also asked for import tariffs under the ASEAN free trade agreement (FTA) to be reduced, in line with concessional tariff on finished products.
The influx of cheap imported rubber products from China and other countries has become a concern for the Indian rubber industry, the Association noted.
With over 35,000 rubber products made available, many local manufacturers, especially the small ones, cannot keep at competing in terms of pricing.
Moreover, levy of anti-dumping duties on Carbon Black and rubber chemicals, major raw materials for the industry, has made the domestic rubber products more expensive compared to imported finished products.
The Association has also appealed that customs duty on raw materials not manufactured domestically be waived. These include butyl rubber and other hi-tech synthetic rubbers and EPDM.
It has also sought reduction of custom duty on raw materials, such as PBR, nylon tyre cord fabric, and steel tyre cord – where domestic production cannot fully meet demand.
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