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Prime Minister Narendra Modi Promises to increase import duty on Rubber

Posted: January 18, 2016 at 7:59 pm   /   by   /   comments (1)

Prime Minister Narendra Modi Promises to increase import duty on Rubber

While speaking at an event organized by Bhartiya Janata Party in Kerala, The Prime Minister of India Shri Narendra Modi stressed on the importance of rubber & rubber products. The importance of rubber products in various industries, especially in the automotive sector for tyres & engine parts is also a key sector for the Prime Minister’s Make In India initiative & keeping that in mind, The Prime Minister promised to increase the import duty on Rubber in his rally.

The promises made at the rally are yet to take shape however, even if the increased import duty on rubber was to take place, it is quite a possibility that the step will be too little too late for the rubber farmers since, the low import duty has already had some devastating effects on India’s rubber farming population.

Until April 2015, the import duty on all forms of natural rubber imports (barring rubber latex) was 20% of the average domestic price of the rubber for preceding three years. The import duty for latex rubber however, stood at a hefty 70%. The government did take some measures to improve the condition of the rubber farmers &, as has been reported in the media, the import duty on the rubber will be increased to 25% starting April 2016. Still, with the prices cheaper by a fifth in countries like Malaysia & Indonesia, that might just act as a smokescreen to the real problem.

It is not an uncommon practice to raise the duty on certain imports as it has become a necessity to so for the government. The government increased the import duty on steel by 2.5% back in August in 2015 to protect the domestic steel industry from cheaper, Chinese steel.

At present, the prices of rubber are near its lowest, & it is costlier to produce rubber than sell it. The average cost of production is around Rs 160 per kg, the selling price Rs 110 per kg.

It will be telling if the government will bring in any new reforms to improve the status of the rubber farmers in the country & if this government is as serious about Make In India as is publicized we might hear some good news on that front sooner than expected.

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  • January 20, 2016 at 4:10 am Himesh SHAH

    Instead of increasing Import Duty on Rubber, Mr. Modi please increase import duty on Cheap Imported Tyres which are not only killing our Rubber Plantation but also Tyre Industries. It will not only help Rubber Plantations but also save our Industries but will also generate employment & give their share in your ‘Make in India’ vision.


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