Tyre Industry Association ATMA Approach Government For Duty-Free Import Of Natural Rubber
Published On 18-Aug-2021
The consumption of Natural Rubber (NR) is expected to increase further, and the annual demand can hit 13 lakh tonnes in current fiscal.
Deficiency of the natural rubber in the domestic market can create major obstruction if proper and timely steps are not taken. Looking at the current scenario, the Automotive Tyre Manufacturers Association (ATMA) has requested the government to permit the manufacturers to import natural rubber in the country without any duty.
It will not only support domestic manufacturing to a large extent but also, increase the consumption volume, and further raise the annual demand to 13 lakh tonnes in the current fiscal.
According to ATMA, the Rubber Board of the Indian government projects 7.90 lakh tones of production in normal circumstances, so natural rubber import must be at least 5 lakh tonnes per annum. The tyre body further said that the tyre industry accounts for more than 70 per cent of the total natural rubber consumption.
The problem according to ATMA, is that the high production figure projected is not compatible with the guidelines of the Rubber Board, as the arrival of sheet rubber in the market have dried thin.
The statement by ATMA further said that during the current quarter of FY21-22, domestic natural rubber production could only meet 42 per cent of the total demand. And as per provisional figures, the production of natural rubber remained at 1.27 lakh tonnes, rather than 3.01 lakh tonnes of consumption. So, with economic recovery heading in the right direction and the auto industry witnessing revival, there is an increase in demand for tyres.
The scarcity of natural rubber is gradually becoming an impediment to the growth of domestic manufacturing. So, duty-free import of NR has become indispensable to bridge the deficit and to make the tyre plants keep running.
Further, the director-general of ATMA, Rajiv Budhraja, said that with a severe crunch being experienced in the prices of natural rubber in the second quarter, the situation could further deteriorate.
As per the body, imports have not shown any adverse impact on the domestic prices, which have been set higher than the international prices for quite some time. So, the dearth of natural rubber need to be addressed, as soon as possible, and government should review their restrictive policy regarding the import of NR.
Currently, there are restrictions on ports across the country except for the two; Chennai and JNPT ports, which further adds to the cost and delays.
Moreover, the tyre industry is facing tough times, as the export obligation has been reduced to 6 months from 18 months.