India’s yawning Natural rubber (NR) deficit is emerging as a cause of concern for the tyre industry, says a communique that Automotive Tyre Manufacturers Association (ATMA) has send to the ministry of commerce & industry. In its representation, the industry has asked for duty free import of NR equivalent to the projected domestic deficit as high import duty of 25% is hurting the price competitiveness of the industry. “Tyre industry consumes 65-70% of the NR produced in the country. Such a drastic drop, as projected, will only increase the industry’s dependence on expensive imports”, Satish Sharma, ATMA chairman, says in a letter to the commerce ministry.
According to ATMA, import of NR attracts 25% duty. However, there is no other way but to import NR to bridge the domestic demand supply gap. On the other hand, effective customs duty on tyres ranges between 0%-8.6% (under various FTAs). The industry has asked for immediate correction in inverted duty structure.
On priority, the industry has asked 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. Industry has also asked for removal of Port Restrictions on natural rubber which is permitted to be imported only at two ports (Chennai and JNPT) further adding to the cost & delays.