Rubber traders protest free imports

The government must consider whether to continue with the policy of duty-free natural rubber imports against the advance licence scheme following the wide gap between domestic and global prices, said N. Radhakrishnan, president, Cochin rubber merchants association, on Tuesday. Circumstances for such imports no longer exist, he said.

At present, domestic rubber prices are, on an average, cheaper by Rs15 per kg, compared with international prices. Duty-free import of rubber under the advance licence scheme was introduced when domestic prices were higher, compared with global prices, he said.

"Since the situation has reversed, it would be appropriate on the part of the government to make a re-thinking on this," he said.

The price of RSS-3, the domestic equivalent of RSS-4 grade, closed at Rs 74.79 per kg at Bangkok today. This was Rs12.79 higher than the domestic price of RSS-4 today, according to Rubber Board.

The bulk of natural rubber imports in the country take place under the duty exemption entitlement certificate, or advance licence scheme.

Out of the 68,718 tonne of natural rubber imported into the country during the financial year 2004-05, 36,398 tonne came under this scheme and 19,111 tonne under the duty entitlement pass book scheme.

"Though the price difference between international markets and the domestic markets is quite high at present, foreign buyers are offering very little margin for Indian exporters, considering the low prices in the country," Radhakrishnan said.

Duty-free import is a major reason for domestic rubber growers getting very low prices, compared with prices in the international markets, he said.

"The fact that Indian growers were badly affected and were in penury during the period 2000 to 2002 should not be lost sight of," he said. The duty-free rubber imports against advance licence has to be viewed in this background, he added.