Tyre industry body ATMA today said the existing curbs on natural rubber import is restricting them from sourcing the raw material at competitive prices at a time when domestic output is declining sharply.
ATMA said it has written to the Commerce Ministry seeking the government's intervention to address declining domestic production of natural rubber (NR) despite peak season.
"In view of such steep fall in NR production, imports are a must to meet the growing demand of tyres from auto and transport sectors. However, government has continued to put curbs on NR import making it difficult for the industry to source this key raw material at competitive prices," Automotive Tyre Manufacturers Association (ATMA) said.
The export obligation period in lieu of duty free import has been reduced to six months and port restrictions have been put in place, it said in a statement.
ATMA further said high import duties on NR and much lower duties on finished tyres is leading to indiscriminate surge in import and dumping of tyres in India.
Latest statistics on tyre import for the April-December of 2015 show more than one lakh truck and bus radial (TBR) tyres were imported in India each month. This accounts for 40 per cent of the replacement demand for TBRs in India. Close to 90 per cent of the import of TBR is from China, it added.
In its representation made to the Commerce Ministry, ATMA has stated the natural rubber production is touching historically low levels and domestic natural rubber scenario is turning bleaker by the day.
"Such low levels of NR production in the range of 55,000 tonnes per month even during the peak season is a matter of grave concern to the industry," it said in a statement.
Notwithstanding the fact that NR prices in India are ruling 20 per cent higher than international prices, the NR production is showing constant fall. The issue needs to be addressed urgently, it noted.
The production of NR has declined to below 5 lakh tonnes in the first 10 months of the current fiscal from over 9 lakh tonnes in 2012-13, it added.
