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Rubber industry wants inverted duty structure



The All India Rubber Industries Association (AIRIA) has urged the Government to remove the inverted duty structure, in the back drop of the import duty levied on raw materials used by the rubber industry being much higher than the finished products.Notably, while import duties on raw materials range from 20% to 70%, most of the imported finished products draw duties at about 10%.

The All India Rubber Industries Association (AIRIA) has asked the government to lower the customs duty on natural rubber (NR) to 7.5% or Rs 10 per kg from 20% or Rs 20 per kg earlier, according to reports.Being the key raw material for Indian rubber industry, NR accounts for 35% to 45% of raw material expense.

Currently, the international price of NR being at Rs 160 per kg, the import duty of Rs 20 works out to about 12.5% which is significantly higher than the import duty on finished rubber products at 10%, leading to inverted duty structure.India has over 6,000 units, with most of them facing crisis-like situation due to surge in raw material expense and import of cheaper products from countries like China. So, it goes without saying, that the removal of the inverted duty structure will be a great boon for the industry.

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