Amid fluctuating prices impacting the rubber plantation sector, the Union Government is taking decisive steps to address the long pending concerns raised by farmers regarding the loopholes in the import rules of rubber.
Aiming to tighten regulations and prevent illegal import of rubber, the Directorate General of Foreign Trade (DGFT) under the Union Ministry of Commerce and Industry has taken steps for a comprehensive review of the Standard Input Output Norms (SION) rates for tyre products.
According to reports, the DGFT has issued a trade notice announcing a comprehensive review of the SION applicable to automobile tyres.
Earlier, the National Consortium of Rubber Producers’ Societies (NCRPS), a collective of rubber farmers, had raised concerns about undue tax-free import of natural rubber under the Advance Authorisation Scheme (Advance Licence) misusing the DGFT norms.
“As per the DGFT notification of 2010, a motor vehicle tyre weighing 100 kg, should contain 44 kg of natural rubber, 8.6 kg of synthetic rubber and 23 kg of carbon.
However, advancement in the tyre manufacturing technology over the past 14 years have led to a decrease in the percentage of natural rubber to 18-28%, while the percentage of synthetic rubber has increased. Due to DFTO not renewing the notification of 2010 on time, the import of rubber is more than doubled by availing duty free benefit. This causes huge tax loss to the country and harm to farmers,” said Babu Joseph, NCRPS general secretary.
Taking a serious note of their concerns over the tyre companies bending the rules under the pretext of Standard Input-Output Norms to suppress domestic prices, the Union Government is moving to update these decades-old norms. These norms, which specify how much raw material is needed to produce a finished export product, are crucial for companies availing of duty exemptions.
