Giant rubber tree in the museum-zoo complex | photo Credit:
The Union Budget has proposed an increase in basic customs duty on compound rubber from 10% to 25% or ₹30 per kg, whichever is less, equivalent to natural rubber, other than latex.
Finance minister Nirmala Sitharaman said in the budget speech that this was to curb rigging in duty.
Welcoming the announcement, Jeffrey Rebello, president of the United Planters Association of Southern India, expressed concern as it was unclear whether the duty would be applicable on imports from countries under the India-ASEAN Free Trade Agreement (FTA). According to the association, compound rubber (CR) imports are expected to grow by 21.73% year-on-year to 1.14 lakh tonnes during 2021-2022. Significantly, ASEAN countries (Thailand, Malaysia and Indonesia) account for 87% of total imports under the FTA with zero duty.
“Therefore, it appears that there may be virtually no significant impact of increase in import duty. Rather the import of CR from ASEAN countries will continue at zero duty. This would apply to other countries such as Korea, Germany and the US.
Shashi Singh, senior vice-president of the All India Rubber Industry Association, said that the increase in duty would hit rubber industries in the micro, small and medium enterprises sector. He said that automotive companies and consumers of rubber parts would have the option of importing finished products which had a lower customs duty of 10%.
“This will apply to other countries like Korea, Germany and America”Jeffrey RebelloPresident of United Planters Association of Southern India,