Centre to raise import duty on rubber to 25 per cent
New Delhi: The Union Government plans
to hike import duty on rubber to 25 per cent while a slew of other steps are
under way to protect the interest of rubber growers, hit hard by declining
prices, Commerce and Industry Minister Nirmala Sitharaman said on Thursday.
A methodology was also being evolved
to monitor the usage of imported rubber to push domestic demand while an expert
committee was examining the issues concerned in-depth, she said in Rajya Sabha
in response to a calling attention motion on the plight of rubber farmers.
A proposal to enhance "the
existing import duty on dry forms of natural rubber from the existing 20 per
cent or Rs 30 per kg to bound-level duty of 25 per cent, has been forwarded
with my recommendation to the Ministry of Finance and is under
consideration," Sitharaman said.
These measures, she said, would
regulate imports and "may have a salutary effect on domestic prices",
as she promised enhanced subsidy of Rs 35,000 per hectare, up from existing Rs
25,000, to the growers by the Rubber Board.
"The concern among rubber
growers caused by the downward movement in domestic prices of rubber has been
noted. ... The government has reduced the period of utilisation under advanced
licensing scheme for import of rubber from 18 months to six months,"
While motivating the rubber consumers
to exhaust stocks and push up demand, the government was also working to evolve
methods to monitor usage of rubber imported under advance license to ensure
that existing stocks are consumed, she said.
Sitharaman said the fall in rubber
prices to Rs 118 in November last from Rs 176 in 2012-13 was due to "slump
in international consumption" and the resultant decline in global prices.
This was aggravated by a relatively low growth in domestic demand for specific
forms of natural rubber.
To boost the segment, she said, the
government intended to expand production as a long-term strategy and was
promoting plantation development programmes in non-traditional regions like the
"Currently, rubber is produced
in 7.57 lakh hectares in the country", she said adding, "During the
12th Plan, an area of 36,300 hectares is proposed to be covered under fresh
rubber plantation for which an outlay of Rs 726.99 crore has been
Commerce department has also
initiated the process of evolving a market-linked insurance based scheme to
stabilise prices, Sitharaman said.
She said a draft scheme has been
formulated, which would require the approval of Finance Ministry and Cabinet
Committee on Economic Affairs. The scheme would be administered by the
Commodity Boards through insurance companies and receive support from the
government through premium subsidy.
Besides, an experts committee,
comprising representatives of rubber growers, state governments, rubber
consumers, user industries and other stakeholders, was examining all issues
concerning production, development, consumption and exports. Seeking
clarifications from the Minister, several members expressed concern over
falling prices and demanded a ban on imports or higher import duty besides
preventing "hoarding" by tyre manufacturers.
Earlier, while moving a calling
attention motion on the plight of the farmers, P Rajeeve (CPM) said 18 lakh
families in Kerala were adversely hit by falling prices and this was impacting
the state's economy.
Charging the Modi government of only
protecting the interests of corporates when rubber farmers were committing
suicide, he said, “This government is a government of slogans. It is only for
corporates.” He demanded that alleged hoarding of imported rubber by tyre
manufactures should be checked.
AK Antony (Congress) said lakhs of
marginal farmers were badly hit by falling prices and demanded
"substantial" hike in import duty to protect farmers' interests. K C
Tyagi (JD-U) said one crore farmers were hit by falling prices, while K N
Balagopal (CPM) demanded a check on imports by tyre companies.
Jairam Ramesh (Congress) said it was
a critical situation facing the farmers where production had fallen to 6,70,000
tonnes from 9,00,000 tonnes and yield too had declined, forcing India, once a
top grower, to occupy fourth slot. He said the subsidy, which the farmers were
getting, was barely 8 per cent of the cost of production and demanded a hike in