Just as country's NR production is down by 16%, tyre firms have shot off a communique to Centre, seeking removal of port restrictions for all kinds of NR imports.
Just as country’s NR production is down by 16%, tyre firms have shot off a communique to Centre, seeking removal of port restrictions for all kinds of NR imports. They also complain that the lack of timely production data from Rubber Board of India is hampering the production planning processes of the industry. According to latest figures released by Rubber Board, the production has contracted significantly by 16% in the first two months of ongoing fiscal. Against production of 0.98 lakh tonne in April-May 2017, only 0.82 lakh tonne production could be achieved in the first two months of the current fiscal. At the same time, consumption has risen 13% to touch 2 lakh tonne, during the same period, leaving a deficit of 1.2 lakh tonne.
In its communication to ministry of commerce & industry, ATMA (Automotive Tyre Manufacturers Association) has pointed out that consistent decline in the domestic availability of NR and its erratic supply is hurting the production process at tyre companies. “Industry needs to take recourse to heavily taxed NR import to meet the growing deficit. While NR import is imperative to meet the domestic demand, the policy environment is highly restrictive.
Not only customs duty (on NR imports) is steep 25%, there are further challenges in accessing natural rubber. Tyre industry needs to adhere to pre import condition for NR import against (tyre) export obligation. Further export obligation period (for tyres) has been reduced from 18 months to only 6 months making it tough for the industry”, says Rajiv Budhraja, Director General, ATMA.
The central government had recently removed port restrictions on the import of NR under advance authorisation. However, industry was looking for removal of port restrictions for all NR imports since import of NR is imperative to keep the factories running, says ATMA. The tyre firms have also reiterated their demand for import of NR on a tariff rate quota (TRQ) basis at ‘nil’ rate of duty to the extent of gap between domestic production and consumption.
Timely unavailability of raw material data for planning is also worrying the tyre industry. ATMA has also solicited the estimated production data for Q2, so that the industry could do effective planning for imports.“As against the standard practice of release of monthly data in the first week of next month, the production, consumption data is being released by Rubber Board very late. Industry had no clue about the NR production patterns during the current fiscal even though a quarter had elapsed”, says Budhraja.