Small rubber industrial units, numbering around 4,500 across the country, have petitioned the Union government to review the proposed 70 per cent rise in tariff on natural rubber (NR).
The All India Rubber Industries Association (AIRIA) says the proposed increase in import duty will severely hit these units and the 450,000 people they employ.
"There is no significant differential in the current domestic and international NR prices which should warrant a drastic action on the lines proposed. According to Rubber Board data, the differential is less than five per cent. The main concern of NR growers and their representatives, of a significant price differential to the tune of Rs 20/kg, necessitating import curbs, is no longer the case," said Niraj Thakkar, president of AIRIA.
Citing a Rubber Board press note, AIRIA states the NR price is a function of several factors.
It has also quoted the latest report of a panel constituted by the commerce ministry to examine the inverted duty structure. In its last meeting, on December 27, the panel recommended there be no change in the NR import policy, it states.
The economic slowdown is affecting all sectors of the industry, especially automobiles. In this situation, the government's endeavour should be to encourage NR-consuming sectors, so that there is buoyancy in rubber consumption, it pleaded.
"There is already a wide gap between domestic NR production and consumption, making imports imperative. Increasing the import duty will discourage the rubber manufacturing sector further, deepening the crisis for both NR consuming and NR producing interests," said Thakkar.
AIRIA says the government should not take any decision without holding detailed discussions with all stakeholders.