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Rubber MSME’S in India demand a six month ban on NR imports.

Posted: January 2, 2017 at 12:34 pm   /   by   /   comments (0)

Rubber MSMEs (Micro, Small or Medium Enterprises) have expressed strong reservations over rubber growers’ memorandum to Commerce Ministry for banning natural rubber (NR) imports for at least six months.
According to All India Rubber Industries Association (AIRIA), any step in this direction would be “anti-industry”.

“Domestic rubber production is far less than its demand. Restrictions placed on import of a critical raw material such as rubber strike at the very root of Make in India Initiative. India is grossly deficient in production of NR.
“Rubber imports are, therefore, inevitable for manufacturing,” says Kamal Chowdhury, President, AIRIA.

Last week, Indian Rubber Growers’ Association (IRGA) had met Union Commerce Minister Nirmala Sitharaman in New Delhi, seeking policy interventions as domestic price of rubber lingered at R139 per kilo, against R172 per kilo production costs incurred.

“Over a million farmers, mostly with small holdings, are engaged in rubber cultivation. To stop the exodus of rubber farmers to other crops, over falling profitability, growers’ association had sought banning NR imports for at least six months,” says IRGA general secretary Sibi Monipally. IRGA had also suggested that Centre should take focused policy measures to incentivise NR exports.

Quoting Rubber Board data, AIRIA points out that against consumption of about 700,000 tonnes of NR in the April-November period during current fiscal, domestic production has been little above 4 lakh tonnes. This has led to a gap of nearly 300,000 tonnes. “Prime Minister had assured that rubber products manufacturing will be included in the Make-in-India initiative. However, there cannot be any Make-in-India, if raw material is not available or if restrictions are placed on its availability to the manufacturers”, Chowdhury told FE.

India’s levy of 25% import duty on NR is one of the highest in the county, according to AIRIA. On the other hand the import duty on import of rubber products is 10% or even lower. MSMEs have been, upset for a long while, over the rising raw material costs for industry. “To pep up the competitiveness of the industry, the import duty on NR should be waived to the extent of domestic deficit,” says AIRIA, in a statement, highlighting its concerns on “the inverted duty structure”.

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