MUMBAI (Reuters) - India's rubber industry wants a cess on natural and anti-dumping duties on synthetic rubber abolished in the forthcoming budget to be more competitive globally.

The cess of 1.50 rupees per kg on buying natural rubber, introduced in 2001 as a relief to planters battling low prices and yield, should be removed as prices have firmed and yield have improved since, the head of All India Rubber Industries Association said.

"Earlier the production was low and the planters were needing support, but today our country has the highest yield and prices have also gone up substantially...there is no reason to impose this cess," said M.F. Vohra, president of the association.

In India, the yield is about 1,879 kg per hectare and the Rubber Board is planning to increase it to 2,000 kg by 2011/12.

The industry body sought the removal of anti-dumping duties on synthetic rubber raw materials, as demand has outpaced production.

The country now imposes anti-dumping duties of $300 per tonne on ethylene propylene diene monomer (EPDM) rubber and $30 on nitrile rubber.

Anti-dumping duty on a product from a particular country is levied to bring prices closer to the normal value of that product in the importing country to avoid predatory pricing.

India requires 20,000 tonnes of EPDM, but only a fifth is produced in the country and imports more than half the total requirement of 30,000-35,000 tonnes of nitrile rubber.

"The duty makes raw materials imports far more costlier than the import of finished products. That is why the industry is suffering," Vohra said.

In 2007/08, exports of rubber-manufactured products are likely to come down by 15 percent, he said. Last year, India exported about 48.23 billion rupees of rubber goods.

Natural rubber is tapped from trees, while synthetic rubber is man-made and produced from petroleum products.

Wed Feb 20, 2008 8:01pm IST

Source: in.reuters.com