The Union Budget proposed an increase in the basic customs duty on compounded rubber from 10% to 25% or ₹30 per kg, whichever was lower, at par with natural rubber, other than latex.
This was to curb circumvention of duty, Finance Minister Nirmala Sitharaman said in the Budget speech.
Welcoming the announcement, Jeffry Rebello, president of the United Planters Association of Southern India, however, expressed concern as there was no clarity if the duty would apply on imports from countries under the Indo-ASEAN Free Trade Agreement (FTA). According to the Association, the import of compounded rubber (CR) increased by 21.73 % annually, and during 2021-2022 it was 1.14 lakh tonnes. Significantly, the ASEAN countries (Thailand, Malaysia, and Indonesia) accounted for 87% of the total imports with nil duty, under the FTA.
“Hence, it appears that literally the increase in import duty may not have any considerable impact. Rather, CR will continue to be imported at nil duty from ASEAN countries. It will be applicable to other countries such as Korea, Germany and the U.S.,” he said.
Shashi Singh, senior vice president of the All India Rubber Industry Association, said rubber industries in micro, small and medium-scale enterprises sector would face problems with the increase in duty. Automotive companies and rubber part consumers would have an option to import finished products that had a lower customs duty of 10%, he said.
“It will be applicable to other countries such as Korea, Germany and the U.S.”Jeffry Rebellopresident of the United Planters Association of Southern India,