Alleging substantial increase in imports and dumping of finished rubber goods in India, rubber MSMEs have asked for an increase in import duty on finished rubber goods to 30 per cent. Currently, the import duty on rubber manufactured products ranges between nil and 10 per cent.

According to the All India Rubber Industries Association (AIRIA), the overall import of rubber products in India has gone up 120 per cent from ₹4,180 crore to ₹9,202 crore in four years between 2011-12 and 2015-16.

“India levies amongst the highest duties on import of raw materials and one of the lowest duties on import of finished rubber goods. This inverted duty structure is leading to a surge in import of finished goods. Of the total import of finished goods, as much as 80-90 per cent is avoidable as domestic rubber manufacturing units have capabilities to meet the demand but low import duties on rubber products especially under FTAs has led to indiscriminate imports,” said Kamal K Chowdhury, President, AIRIA.

According to the association, the finished products can be easily imported as the import duty on rubber products is between 0 to 10 per cent, while the duty on raw materials for rubber industry is between 5 per cent to 70 per cent. Not only import duty on raw materials is higher, the duty is levied even on those raw materials which are not produced in the country thereby increasing the cost of production in India. If the idea is domestic value addition, this anomaly of inverted duty needs to be corrected.