On Friday, UPASI had, in a statement, urged Union commerce minister Piyush Goyal to put a halt in NR imports for at least two years.
Reacting to United Planters’ Association of Southern India’s (UPASI’s) recent demand for immediate moratorium on natural rubber (NR) imports, the tyre industry has said the domestic NR output is “woefully deficient” and can barely feed 60% of the tyre plants’ needs. If the Centre backs this demand, the tyre industry, already in unprecedented crisis, will go uncompetitive, said Automotive Tyre Manufacturers’ Association (ATMA).
In a quick missive to K N Raghavan, executive director, Rubber Board of India, ATMA director general Rajiv Budhraja refuted the claim that “NR imports have led to suppression of domestic NR prices”. “Domestic prices have ruled 25% higher than international prices at any given point of time,” he said. Even in the last three years, when India’s NR exports saw a halt, the tyre industry had picked up the entire domestic production of NR, ATMA claimed in the letter.
The tyre industry also alleged that although “NR imports are an absolute must, in view of paucity of domestic production”, they attracted “a whopping 25% import duty, which is one of the highest in the world.” It is domestic availability that determines the NR imports, according to Budhraja. An example is the fall in NR imports in FY20 by 20%. “This was because domestic NR production was up by 9%. In this period, only 4.6 lakh tonne of NR was imported. This, more or less, matches the domestic production-consumption gap of 4.1 lakh tonne,” Budhraja told FE.
Besides the high NR import duty, other factors like provision of NOC for import of quality rubber, reduction of export obligation period, port restrictions, pre-import conditions for NR imports, which were clamped to help the rubber farmer, have not served rubber production, according to ATMA. On the contrary, for tyre industry, they have been stumbling blocks in scaling up manufacturing and export foot print, he said.
On Friday, UPASI had, in a statement, urged Union commerce minister Piyush Goyal to put a halt in NR imports for at least two years. RM Nagappan, president, UPASI, had called for a safeguard duty on NR imports, till the rubber farmers recovered from the production halt, during the national lockdown. Nagappan had said it was the “unrestricted imports from South Asia” that caused the steep fall in rubber prices in the last eight years.