Financial Daily from THE HINDU group of publications
Thursday, May 30, 2002
Industry & Economy
`Import curbs crippling rubber goods industry'
KOLKATA, May 29
THE ban on natural rubber (NR) imports under advance licence and restricting regular imports through two identified ports (Kolkata and Visakhapatnam) and imposing conditions such as strict conformity to BIS standards may sound the death knell for the rubber industry, and thereby, eventually for the rubber planters themselves.
Talking to Business Line from his office in Mumbai, Mr M.F. Vohra, Chairman of Capexil and Managing Partner of Zenith Rubber (an exporter of rubber sheets), said the only motive behind such curbs on natural rubber imports in a QR-free regime under WTO could be to create more bottlenecks for the Indian rubber goods manufacturers and for exporters in importing NR at international prices.
Pointing out that both Capexil and the All India Rubber Industries Association (AIRIA) had taken up the matter strongly with the concerned Government departments, Mr Vohra questioned the logic behind the reason cited for permitting imports of NR only through Kolkata and Vizag ports, i.e., the proximity of the office of Director-General of Commercial Intelligence and Statistics DG & CIS, located at Kolkata, for better monitoring of rubber imports.
He said the logic was hollow and unsubstantiated as all major ports in the country were computerised and the proximity of the aforesaid office had no relevance. Describing the rubber industry as the most discriminated against, he called for a level playing field, especially if the Government was serious about export promotion as a national priority. AIRIA has already described these measures as ``anti-industry, anti-export and anti-development''.
On the stipulation that the imported NR should conform to BIS standards, Mr Vohra said the BIS standards in many cases differed from those prescribed by Thailand, Indonesia, Vietnam and Malaysia in minor areas such as bale weight, labelling, marking etc, whereas in major areas such as chemical and physical properties, the standards abroad were equivalent to BIS standards, if not better. He said there was no ISO or BSO standard for sheet rubber and the standards are as prescribed in the ``International Standards of Quality and Packaging for Natural Rubber Grades'', (popularly known as the Green Book).
He clarified that industry was still apprehensive that owing to minor variations, import of high quality NR mainly for export production of rubber products for special applications, may be disallowed by the customs authorities, leading to major disruption in production as well as supplies.
A key problem, according to him, was that comparable grades of such technically-specified rubber used by exporting industries manufacturing specialised items such as critical auto components, nipples for feeding bottles and other products for pharma-medico applications were still not available in the country in the right quality and quantity. He said special grades of NR such as ISNR-3 CV, ISNR-3L, ISNR-5, which are imported for export production, may not be allowed as the international packaging specifications were different from BIS.
He said it was a pity that India, being the third largest producer of NR in the world with the highest per hectare yield of around 1,575 kg, coupled with low labour cost, was unable to export NR in a big way in spite of high subsidies.
He felt it was ironical that this subsidy was not available to the Indian manufacturers and exporters of rubber products for procurement of indigenous NR through the deemed export route.
He said with the advent of WTO, the Indian rubber goods manufacturers have to compete not only in the international market, but also on the domestic front. ``Hence, procurement of NR from indigenous sources at a price much higher than international prices will hit the Indian rubber industry both in the international and domestic markets, opening the floodgate of imports of rubber products into the country.''
Pointing out that Capexil, along with AIRIA, had already held several rounds of discussions with the Rubber Board on this issue of NR import, he said the situation, if allowed to continue, may lead to a massive decline of the Indian rubber industry, which in turn may severely affect the plantation sector owing to low offtake of natural rubber by the industry.
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