As Centre imposes tyre import curbs, natural rubber sector seeks similar step
The Commerce Ministry’s decision to impose restrictions on tyre imports has revived the hopes of domestic rubber growers, who are hoping for a similar move on natural rubber imports.
KN Raghavan, Executive Director, Rubber Board, told BusinessLine that the decision to restrict tyre imports will help the domestic tyre industry, which can now cater to a larger portion of the domestic market. This should, in turn, help the rubber growers, as tyre makers source all the natural rubber required for production from the domestic sector. “If this is done, the demand for natural rubber will go up, benefiting rubber farmers,” he said.
Ajith BK, Secretary, Association of Planters of Kerala, said the planters’ body welcomes the tyre imports curb that will encourage the ‘Make in India’ initiative in the sector. At the same time, rubber growers have said due importance should be given to the ‘Grow in India’ campaign by controlling imports by the consuming industry.
However, he said, growers are apprehensive of the one-sided approach adopted to control the import of finished products such as tyres, and keeping the gates open for unrestricted import of raw material such as natural rubber. This will further hamper the interest of growers, he added.
“It is high time the government imposed some restrictions on natural rubber imports to perk up demand in the domestic market,” he added.
Source of concern
The rising imports have been a source of concern for the growing community, as is evident from Rubber Board figures which show that shipments in 2018-19 stood at 5,82,351 tonnes, while the figure in 2019-20 till February-end stood at 4,33,466 tonnes.
The Commerce Ministry, in its effort to promote domestic manufacturing, has imposed curbs on import of new pneumatic tyres used in cars, buses, lorries and motorcycles by amending the import policy from “free to restricted” through a DGFT notification. Raising concern over the increasing imports from China, domestic tyre manufacturers have been demanding such restrictions for a long time.
However, sources in the natural rubber sector pointed out that the Automotive Tyre Manufacturers Association (ATMA) has been successful in convincing the government about the persistent challenges posed by the steady growth in import of tyres during the past one decade. But the moot question is whether the sustenance of the amendment in the backdrop of the growing process of market integration induced by rubber trade associations and the implications on other segments of the rubber sector, especially rubber production, which is looking for a comprehensive rehabilitation package, deserves attention from a national policy perspective.
The need of the hour is to define the issues by underlining the historically-inherited inter-connectedness of various segments of the rubber sector and frame priorities and strategies rather than clinging to isolated approaches for survival, the sources said.