 "No decision to reduce import duty on rubber as of now, says govt")
The government is not looking at reducing import duty on rubber as of now, a senior official said on Monday, amid a certain section of the industry demanding a duty cut. This is because the government believes the differential between local and international prices has been maintained.
“If you see the local price vis-a-vis the international price, there has been a differential maintained on account of that import duty…I don’t think there is any rethink on reducing import duty as of now,” commerce department additional secretary Amarjeet Singh Bhatia said.
The government’s response comes in the backdrop of the demand for duty cuts from the user industry, such as tyre makers, while local producers oppose any reduction. Currently, the import tax on natural rubber is 25 per cent or Rs 30/kg, whichever is higher.
The official further said that the financial assistance for the rubber sector has been raised by 23 per cent to Rs 708.69 crore for FY25 and FY26.
During the previous financial year, consumption of rubber in India stood at 13.5 lakh tonnes, while production was lesser at 8.39 lakh tonnes. As a result, India ends up importing natural rubber to meet local demand from neighbouring countries such as Vietnam and Indonesia.
“To support the rubber industry, planting of rubber will be undertaken in 12,000 hectares in traditional areas during 2024-25 and 2025-26 with an outlay of Rs 43.50 crore. For this, the rate of assistance has been increased to Rs 40,000 per hectares from the earlier Rs 25,000. This will help cover the increased cost of production as well as provide additional incentive to growers for planting rubber. Around 3,752 hectares will be brought under rubber cultivation in non-traditional regions with an outlay of Rs 18.76 crore during the same period,” an official statement said.