KOCHI: In a largely unpublicised move, the Union government has said port restriction will not be applicable to the import on natural rubber (NR) for all varieties, a move which will depress the domestic NR prices. The restriction has been lifted for imports through the Chennai Port and Nhava Sheva (Jawaharlal Nehru Port).
However, the port restriction shall not be applicable to imports under advance authorisation.
The advance authorisation allows duty-free import of inputs (NR in this case), which are physically incorporated in the export product (making normal allowance for wastage). These include the fuel, oil, energy, catalysts which are consumed/utilised to obtain the export product. The relaxation allows tyre makers to import the large quantity of NR and advance authorisation gives them six months’ time to export the final product. Growers reckon the move will affect the domestic prices of NR.
Santhosh Kumar, senior vice-president, Harrisons Malayalam Ltd (HML), said almost 30 per cent is imported under this scheme now. “Depending on the price, more quantity can be imported,” he said.
According to him, the importers also get six months to export the final product.
For RSS-3 grade of rubber, the price in Bangkok was Rs 111/kg on June 13 while the price in India was Rs 123/kg. “Importers can use this scheme when the prices suit them, as is the case now,” said Joshy Joseph Maniparambil, Kerala Farmers Federation (KeFF) general secretary, said, “We had requested not to include Chennai. Unfortunately, they have included the Chennai Port too. This will have a sudden effect on the local prices as most of the tyre industries are located in and around Chennai.”
Santhosh Kumar too flagged a flaw in the scheme.
“Under the scheme, which was drafted in 1971, it is presumed a tyre contains 44 per cent of natural rubber. So, for a 100 kg import, they can get away by exporting two tyres. However, technology has changed and the synthetic content in the tyres is so much a tyre now contains only 18-20 per cent of NR,” he explained.
This means, with the same quantity of rubber imports, a company can sell three tyres locally even while meeting the export commitment of two tyres.
“We need to bring in changes to the rule, given the changes in technology and the drastic reduction in rubber content in the tyre industry,” he said. Rajiv Budhraja, Automotive Tyre Manufacturers’ Association director general, could not be reached for his comment.