Proposal To Cut Import Duty

The Commerce ministry’s  proposal to reduce import duty on natural rubber from Thailand in a phased manner has hit prices badly in Kerala.

 Rubber imports stood at 85,048 tonne in 5006-07-an all time high resulting in stocks swelling to 161,000 tonne and a price reduction in the current off season. Reducing the import duty on rubber would further aggravate the  market situation, according to both growers and traders. As part of a bipartite agreement with Thailand, the commerce ministry has put forward a proposal to reduce the duty and finally scrap it completely.

 The government of Thailand has strongly demanded scrapping the duty on rubber as part of the agreement. But since there will be strong protest from the million plus growers, the ministry is not ready to concede to the demand. But as a gesture of abandoning the duty, it may reduce it considerably and may eventually scrap it. Thailand, the world’s largest producer around 32 lakh tonne a year and exports a major chunk of it.

 Since India consumes over 800,000 tonne a year. Thailand is very keen on ensuring duty free exports to India. But the move of the government has already evoked protest in Kerala, where more than 92 percent of the total rubber is produced. During a meeting of the India- Thailand trade negotiating committee, the Thai representatives sought market access for rubber. That led to speculation about liberalization of imports and reduction of import duty, sparking off protests in Kerala. With vocal Malayalee Politicians and planters living up to their reputation the ministry had to face the music. Such was the impact of the carpet bombing that, a statement was formally issued to clarify that there was no move to clarify that there was no move to  liberalise import of rubber. “The Indian side while taking note of the request (from Thailand), made no commitment, whatsoever, for reduction of tariff on natural rubber”, said the clarification. Only after that ministry left no stone unturned to publicise the clarification as widely as possible especially targeting Kerala.

More News