India Hikes Rubber Import Duty to Protect Local Growers.

MUMBAI - India has raised import duty on rubber by almost 50% to protect the domestic growers after imports rose in the past months because of cheaper international prices.

The government has increased the duty to 20% of the prevailing market price or 30 rupees a kilogram--whichever is lower, it said in a notification on Saturday.

The duty was 20% of the prevailing market price or 20 rupees a kilogram--whichever is lower.

At the current market price the effective import duty will increase to about 28 rupees a kilogram from about 18 rupees.

Rubber imports jumped by 53% to 237,723 metric tons between April and November, according to Rubber Board data. Rubber growers were demanding an increase in import tax because imports were hurting incomes.

Most tire companies imported large quantities over the past few months when international prices have been low. Imports are from Vietnam, Indonesia and Thailand.

Prices of block rubber, one of the most imported rubber items, in those countries are now at about 140 rupees a kilogram while in India prices are about 150 rupees.

The government said the duty will benefit more than 1.2 million farmers.

"Production costs have gone up significantly for domestic producers in the past one year while higher imports were preventing us from even recovering our minimum investment costs," said Suresh Koshy, president National Federation of Rubber Producers Societies.

India is the world's fourth-largest natural rubber producer.

Source : online.wsj.com