More than 200 firms producing rubber-based products have shut shop last year due to higher input price of rubber and the inverted duty structure, which favours import of finished products, TK Mukherjee, president, All India Rubber Industries Association (AIRIA), said.
Non-tyre rubber industries consume 60% of the natural rubber produced in the country with automotive tyre manufacturers consuming the rest.
Demand for natural rubber over strips supply by almost 2 lakh tonne per annum and imports are necessary to keep the industry running, he said.
Local rubber prices have nearly doubled in the past year on a drop in output due to drought coupled with rising demand from tyremakers. RSS 4 prices touched Rs 186 per kg last week in the Kottayam market while the comparable international price hovered around Rs 150 per kg.
Tyre manufactures and non-tyre industries have been asking the government to allow duty free imports of 2 lakh tonne of natural rubber to cool the domestic market.
“But the inverted duty structure, where rubber imports are taxed 20% while finished rubber products are taxed less than 10% works against the interest of the domestic industry. It is cheaper to import finished products,” he said.
Demand for products like transmission belts, conveyor belts, hoses, tubes, cables and wires are increasing rapidly with good growth in the mining and infrastructure industry. “But importing a conveyor belt from China works out to be cheaper than buying one from India,” he added.
Domestic tyre manufactures are also claiming large-scale imports of Chinese tyre into India due to the current duty structure.
(financialexpress.com)
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