Financial Daily from THE HINDU group of publications
Wednesday, Jul 31, 2002
Agri-Biz & Commodities - Rubber
Curbs on rubber imports thru Kolkata, Vizag may go
KOLKATA, July 30
THE decision to allow general import of natural rubber only through the two designated ports of Visakhapatnam and Kolkata is likely to be reviewed. Industry expectations are that this restriction may soon be lifted. At a recent meeting between representatives of the rubber goods manufacturing sector, and high-level Commerce Ministry officials, on various issues pertaining to the rubber goods sector, the industry has been assured that the matter is being looked into and a favourable decision may emerge soon.
Asked on this, Mr M.F.Vohra, Chairman of Capexil, and a member of the Central Committee of the All-India Rubber Industries' Association (AIRIA), said from the industry point of view, this was the best time to lift the curb, when the international prices of natural rubber were still higher than that of domestic prices.
If the decision is deferred by say another two months, global prices may come down, making imports more attractive.
Import of natural rubber under the advance licence scheme is banned, and regular imports are allowed only through the Visakhapatnam and Kolkata ports.
The logic, according to the Government, is that these two ports were located in close proximity to the office of the Director-General of Commercial Intelligence and Statistics (DGCIS), Kolkata, which may enable better monitoring of natural rubber imports.
Describing the logic as "flawed and unsubstantiated'', he said all major ports in the country today were computerised, and proximity to the office of DGCIS to better monitor imports actually had no relevance.
Dispelling fears of excessive imports, he said only some 2,000 tonnes of natural rubber had been imported in the first three months of the current financial year. During 2001-02, some 52,000 tonnes were imported against a domestic production of 6,50,000 tonnes, a mere eight per cent.
On the Government directive that imported natural rubber should conform to the BIS standards, he said this was becoming difficult as the BIS standards in many cases differed with the standards as prescribed by the exporting countries such as Thailand, Indonesia, Malaysia and Vietnam, in minor areas such as bale weight, labelling and marking.
Mr Vohra clarified that the products of these countries adhered to global standards as prescribed under the "International Standards of Quality and Packaging for Natural Rubber Grades''.
He said the key problem was that comparable grades of technically specified natural rubber needed by companies such as Garware Elastomers were still not available in the country in the right quality and quantity.
He said representations had been also been made to reduce the purchase tax of 18 per cent on domestic natural rubber levied by the Kerala Government.
Pointing out that an ad valorem tax proved to be costlier, he said the rubber goods industry, dominated by the small and medium players, favoured a specific duty compared to ad valorem rates.
He suggested that whatever steps taken by the Government should be in the overall interests of the 3.5 million strong rubber community (comprising both growers and industry people).
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