Freeze NR import under advance licence, IRGA urges Centre

Written by M Sarita Varma | Thiruvananthapuram | Updated: Jul 22 2014, 05:38am hrs
The Indian Rubber Growers Association (IRGA) has pleaded with commerce minister Nirmala Sitharaman to temporarily suspend import of natural rubber (NR) under the advance licence till domestic prices recover.

Distressed by the prolonged bear-hug in domestic prices of NR, the 12-lakh-strong rubber farming community has urged the Centre to increase import duty on all rubber goods (including tyres) to 8%. "We have also requested the ministry to revisit the norms for duty-free import of NR. Import should be restricted to the end-user. Ideally, beyond domestic requirement, the import duty of NR should be jacked up to 40%. It would support the one-crore people involved in rubber production and allied agri-business if the Centre would facilitate mandatory usage of rubberised bitumen in the country," Sibi Monipally, general secretary, IRGA, told FE.

Imports of NR have been growing, pushed by auto sector demand. During 2010-11, 1.91 lakh mt of NR was imported. In 2011-12 this was 2.14 lakh mt and in 2013-2014about 3 lakh mt. In 2010-11, 2011-2012 and 2013-2014, duty free imports under advance licence were 71%, 70% and 65% respectively of total NR imports.

"In tune with the rising imports, Indian prices had fallen from R242 per kilo to R142 per kilo over two years. Domestic prices are fluctuating and the gap is widening with international price. This could impact the confidence of farmers, causing a retreat from rubber cultivation," says Monipally.

Production and consumption of NR in India is almost balanced, according to IRGA. The requirement by 2020 will be 15 lakh mt. To attain this output goal, farmers would need some policy support from the Centre, say growers.

Meanwhile, Jose K Mani, a Kerala Congress MP representing the rubber plantation belt, has requested the Centre to set up a rubber university in Kottayam, in view of the fact that carbon sequestration potential of rubber trees is greater than other species used in afforestation programmes.