Court gives Centre 4 weeks to respond to rubber industries plea

Kochi Dec. 9

On an appeal filed by the natural rubber consuming industry, the Delhi High Court has directed the Government of India to respond within four weeks. This is the second petition filed by the consuming industries before the Court in the last six months.

The first petition was filed before the Delhi High Court in May this year, appealing for action to curb spiralling rubber prices, which at that point of time was 60 per cent higher than the year before at Rs 170 a kg.

As there was limited action by the Government and the prices of natural rubber had reached Rs 205 a kg in November, the user industry was forced to appeal to the court once again, Automotive Tyre Manufacturers Association (ATMA) said.

Spiralling prices of natural rubber is not the only issue hurting the industry. Compounding the problem is the anomaly of inverted duty structure in India, where tyres can be imported at 10 per cent duty, while natural rubber attracts 20 per cent import duty, ATMA highlighted. The association pointed out that the gap between production and consumption has been increasing, with the shortfall increasing to 100,000 tonnes this year.

All these factors prompted the rubber consuming industry associations consisting of the All India Rubber Industries Association, Indian Cycle Rickshaw Tyre Manufacturers Association and ATMA, to appeal to the court.

The Department of Commerce had decided that the advalorem tariff on imports should be restricted to 20 per cent or Rs 20, whichever is lower. The decision was conveyed to the Ministry of Finance for issuance of formal notification, ATMA pointed out.

Meanwhile, faced with spiralling natural rubber prices, which increased from Rs 170 to Rs 205, the consuming industry was constrained to file yet another appeal before the High Court.

“This is an unnatural situation that no other country in the world is facing — short on supplies and high on prices, high on speculation and inability to import. In the first half of the year, all of us in the industry have taken a huge beating on margins. This comes at a time when the entire tyre industry is putting up fresh investments and new technology to meet the needs of the automotive segment. I am sure it is not possible for the Indian tyre industry to be globally competitive without legitimate Government support,” Mr Neeraj Kanwar, Chairman of ATMA, said.

(Source: http://www.blonnet.com/2010/12/10/stories/2010121053481800.htm)