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Call to modify rubber Act

Mohan Padmanabhan

KOLKATA, Sept. 17

IN a representation to the Union Minister of Commerce and Industry, Mr Murasoli Maran, Capexil has pointed out that giving legality to minimum price of natural rubber and go-by to the market mechanism of demand-supply would put the rubber industry (parti cularly the non-tyre sector) in great difficulty. This could adversely affect the overall export performance of the rubber products segment, including tyres.

The council is of the view that restriction on import of natural rubber under the advance licensing scheme (for export production) has only further aggravated the situation.

Talking to Business Line, Mr M.F. Vohra, all-India Vice-Chairman and head of the rubber products panel of Capexil, said difficulties in sourcing certain grades of natural rubber, besides making Indian rubber units uncompetitive, might also lead to large- scale closure of units, particularly in the small sector.

Under such a scenario, the fate of the plantation sector, too, could not be any better. He said the Rubber Act had to be modified to effectively delete the provisions for minimum and maximum prices for domestic natural rubber.

Stating that export of miscellaneous rubber manufactured goods -- now in the product basket of Capexil -- had registered a robust growth of 48 per cent in the last three years, he said Capexil should be entrusted with the responsibility of exporting natu ral rubber instead of the Rubber Board. The board, he felt, should be left to concentrate on its core activities of growing rubber, improving yields, standardising grades and quality, and also work on packaging acceptable to international markets.

Calling for a level-playing field for the entire rubber community, he said exporters should be allowed to import natural rubber directly under advance licence. Capexil, for the current financial year, had fixed an export target of Rs 1,000 crore for rubb er products (non-tyre).

Asked about the domestic rubber prices, he said the prices were at present higher than the international market rates, though India still had the highest yield at low labour cost. Explaining the current position, Mr Vohra said India, on an average, produ ced 6.3 lakh tonnes of natural rubber annually and imported 12,000 tonnes annually.

He said the cost of import of 12,000 tonnes of natural rubber was around $7.5 million, which on conversion into finished non-tyre rubber products could fetch almost $30 million in foreign exchange. Currently, advance licence holders, according to Mr Vohr a, could neither source their requirements of natural rubber from STC nor through direct imports. Even the facility for direct import of natural rubber latex had been withdrawn, causing serious difficulties for exporters of latex surgical and examinatio n gloves.

Seeking removal of anti-dumping duty imposed on certain types of synthetic rubbers like SBR, EPDM, nitrile etc, he said these were required for manufacture of special purpose rubber products.

Dumping duties led to rise in cost of production of finished products, which in turn diluted the competitive strength of Indian rubber products in the global market, he said. ``SBR is not in production in the country, but anti-dumping duty on it still co ntinues,'' he said.