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Atma Raises Pitch For National Policy On Rubber

Date 07-May-2014
Subject Atma Raises Pitch For National Policy On Rubber

Rubber based industry today urged the government theneed and imperatives of a comprehensive National Rubber Policy to be framed, on the lines of the Auto Sector Policy. It should be outlining medium-long term objectives, roadmap and recommendations, sectoral competitiveness etc.

AutomotiveTyre Manufacturers Association [ATMA] has already submitted aproposal for National Rubber Policy which is likely to come up for discussion in stakeholders' consultations on 9th of this month at Kottayam. For the last several years, domestic consumption of NR has outstripped its availability.

According to Rubber Board figures, the gap between domestic production and consumption widened to 133,400 tonnes in the just concluded year 2013-14. Industry estimates that during the current fiscalyear also the production will lag behind consumption by around 100,000 tonnes. According to ATMA, Natural Rubber imports are therefore imperative to plug the demand supply mismatch and yet the industry continues to suffer from 'Inverted DutyStructure'.

Various trade agreements that India has signed with its neighbourshave further aggravated the inverted duty structure of the industry. While basiccustoms duty on tyres is 10%, under various Trade Agreements, the duty (on tyres) is actually much lower than the basic rate of customs duty.

On theother hand, NR is in the negative listin these trade agreements and hence not eligible for any concessional treatmentin duty. For instance under ASEAN FTA, tyres can be imported at amuch lower 6% duty but NR is inthe negative list. Under Indo-Sri Lanka agreement, tyres can be imported at Nil duty but there is no duty concession on NR. Under India-Malaysia agreement also radial tyres can be imported at 6% duty but NR is in the negative list.

"The basic principle that the policy makers need to consider is that wherever the basic raw-material(like NR for rubber industry) is in the 'negative list' and not eligible forany concessional treatment in duty, the finished product shouldalso be kept out of the purview of concessional duty," said Raghupati Singhania, vice chairman, ATMA. He added that much like the Auto Policy which envisions a longterm roadmap for the Industry, the country also needs a 'National Rubber Policy' as rubber touches the lives of over 10 lakh growers and has a rich and diverse value chain encompassing tyres, other rubber goods like conveyer belts,auto components, footwear, medical supplies, sports equipment etc.

Eachsegment of the rubber sector has its own set of complexities which need to be addressed in a policy document with defined growth parameters. Amitab Kant, secretary,Department of Industrial Policy and Promotion announced that both Inverted Duty Structureand inconsistencies in India's FTAs are being seriously looked into through two recently constituted committees. According to him, manufacturing needs to be given a fillip to lift overall GDP and issues such as inverted duty structure undermine industry's competitiveness. Leaders of ATMA met the new Secretary and galvanised support for National Rubber Policy.

Source : business-standard.com

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