ATMA requested government to remove port restrictions, lower duty on rubber imports

NEW DELHI : Rajiv Budhraja of ATMA said it is a double whammy for tyre manufacturers as domestically available rubber is high priced and in short supply, while dependence on import continues to increase when there are challenges on imports with container shortages,While rubber prices are trading at around 8-year highs in the Indian markets, there are reports suggesting that domestic natural rubber catered to just about 50 percent of the actual demand in Q1 and Q2, Q3 are likely going to be the same way.In the Indian markets, rubber prices are trading at Rs 180 per kg while international prices are trading at Rs 140 per kg.In an interview with Manisha Gupta, Rajiv Budhraja of Auto Tyre Manufacturers’ Association (ATMA) said that it is a double whammy for tyre manufacturers as domestically available rubber is high priced and in short supply, while dependence on import continues to increase when there are challenges on imports with container shortages.

“The difference between domestic and international prices is also in a very wide range. So, that makes it very difficult for the tyre companies in India who are sourcing domestically the entire rubber that is available but that is also awfully short of our requirement. So, it is a double whammy that domestically available rubber is high priced and it is in short supply. Also, our dependence on imports continues to increase when there are challenges on imports as well with infrastructure, logistics, shipping and container shortages. So, it is a very grim and equivalent to an SOS situation for the tyre industry in India,” Budhraja said.

He said the industry has requested the government to remove port restrictions, lower duty on rubber imports as well as ease pre-import conditions.

“We have requested the government to remove port restrictions because rubber can be imported only at two ports and it is difficult to plan the logistics considering the congestion that is happening across all the major ports in India. In the present context, it is irrational to have such a high duty on rubber imports which makes it difficult for the tyre companies to stay competitive. Thirdly there are procedural and operational difficulties of advanced licence imports with pre-import conditions in that. And that makes it very difficult for the tyre companies to plan their exports. So if these three issues are addressed by the government it would ease the pain of the industry to some extent,” Budhraja added.

Source : CNBC TV18