The Indian Union Budget 2015-16 to be
presented on 28th February and a lot of anticipation is brewing in the rubber
and allied industries which hasn’t seen much growth in the last two years. The
industries have their own set of demands and are expecting changes in the Union
Budget.
Auto sector is expecting roll back of excise
duty hike to buoy demand, as excise duty hike has roughly translated into a 4-6%
price hike across passenger vehicle categories, affecting demand. Avoid
inverted duty structure - the excise duty on commercial vehicles is 8%, while
raw material and engineering inputs are taxed at 12%.
Lower the Special Additional Duty (SAD) on
imported raw material to 2% from 4%, and bring down customs duty on various
inputs to 5% from 10%. Offer special incentives for automobile exports, policy
on overloading of commercial vehicles and a policy towards replacement of
vehicles to promote cleaner environment and fuel efficient vehicles. Clear the
uncertainty over exclusion of automobiles from the Free Trade Agreement with
the European Union. If it comes into effect, European carmakers would be able
to sell vehicles at lower duty in India.
Rubber industry wants removal of anti-dumping
duties on the import of raw materials like rubber chemicals (like Butyl Rubber
SBR grade 1500/1700), which are not manufactured locally. Levy anti-dumping
duty on imported Chinese tyres. The high import duty on rubber raw materials
makes it difficult for the domestic tyre industry to compete against imported
Chinese tyres.
Kerala state had sought Central assistance
many times to save the rubber growers. The rubber growers had been demanding as
high as a 75% hike, even if the import duty on rubber is raised, it will not be
up to the level expected, the chance is to increase it from the current 20% to
30%. In the maiden budget of the BJP government, assistance for rubber farmers may
not get attention, due to political reasons.
Rubber Mark, the apex federation of primary
cooperative rubber marketing societies, had suggested setting up of a price
stabilisation fund to compensate the loss to farmers due to price fall. Today
the issue was raised during Zero Hour in the Lok Sabha. Congress
and Left MPs from Kerala accused the government of not heeding to the plight of
rubber growers and demanded an income stabilisation fund be set up to protect
them.
The benchmark RSS4 grade rubber closed at `.140.30
a kg at Kottayam, while RSS3 grade closed at `.116.90 a kg at
Bangkok and Malaysian SMR20 closed at `.87.19 a kg. On
National Multi Commodity Exchange March 2015 futures were trading at `.126.40
a kg, April at `.127.85, May at `.128.70, June at `.130.20,
July at `.131.45 and August at `.132.60 a kg. On
Tokyo Commodity Exchange, March 2015 futures series closed at ¥217.7 a kg, April
at ¥218, May at ¥218.1, June at ¥217, July at ¥215.9 and the contract for
delivery in August 2015 closed at ¥214.5 a kg.
For Union
Budget 2015-16 Highlights visit: www.rubber4u.com
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