Finance Minister Arun Jaitley announced in Lok Sabha that the basic customs duty on natural rubber has been raised from 20 per cent or Rs 30 per kg, whichever is lower, to 25 per cent or Rs 30 a kg, which ever is lower.
India's rubber imports touched an all-time high of 4.15 lakh tonnes in 2014-15 owing to lower international prices and fall in domestic production, according to the Rubber Board data.
Natural rubber production declined to 12-year low at 6.55 lakh tonnes in 2014-15 from 7.74 lakh tonnes in the previous year.
Rubber price has dropped significantly to Rs 122.50 per kg from around Rs 220 per kg in January 2011, affecting the farmers income.
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The hike in import duty would regulate imports and have a salutary effect on domestic prices.
Currently, rubber is produced in 7.57 lakh hectares in the country.
Total rubber consumption by various industries, including tyre manufacturers, was 10.18 lakh tonnes during 2014-15 which was 3.7 per cent more than the previous year.
The total area under rubber cultivation in Kerala is at 5.45 lakh hectares. It is the livelihood of as many as 11.50 lakh farmers with most of them small holders having less than 1.5 hectares under rubber. Total rubber production in Kerala for the year 2012-13 stood at 8 lakh tonne.
Rubber growers have been demanding increase in the duty while user industry like tyre makers were opposed to the demand.