The Rubber Board has exhorted the tyre industry to source natural rubber from the domestic market and restrict imports to the bare minimum.
Highlighting the difficulties faced by rubber farmers due to sustained low prices, the Board said that any additional imports beyond what is required to meet export-import obligations could lead to a sharp fall in domestic rubber prices and drive them into penury.
The Board’s move comes at a time when the tyre industry is suggesting duty-free import of natural rubber to bridge the gap between domestic production and consumption.
Higher capacity
KN Raghavan, Executive Director, Rubber Board, said the domestic rubber sector can reverse the trend of falling production during 2019-20 by producing 7,15,000 tonnes, meeting almost 62 per cent of the total annual consumption. “We were looking at taking production towards 8 lakh tonnes when the lockdown took place. However, we have a capacity to produce more than 1 million tonnes of natural rubber annually,” he told BusinessLine.
The production and consumption of rubber in 2020-21 are projected provisionally at 710,000 tonnes and 900,000 tonnes, respectively, with a gap of 190,000 tonnes. The opening stock of rubber in 2020-21 is higher, at 334,006 tonnes, and the eligibility for duty-free import under the Advance Authorisation Scheme is around 150,000 tones. Thus, there will not be any need for duty-paid import of rubber in 2020-21, said Raghavan.
The industry is presently permitted to source natural rubber without payment of duty for meeting its export commitments. The duty-free import in 2018-19 and 2019-20 amounted to 173,175 and 139,446 tonnes, respectively.
“It would be grossly unfair to seek the protection of non-tariff barrier for the final product manufactured by the industry, while asking for duty-free import of a raw material which is produced by small and marginal farmers,” said Raghavan. Since rubber farmers are among those who provide employment, any step that affects their livelihoods should be opposed, he added.