Tyre producers seek cut in customs duty on inputs

Indian tyre sector is witnessing healthy growth in revenues and profits.  Meanwhile, there is surge in prices of many inputs, including natural rubber.

Tyre grade RSS 4 rubber prices have surged from Rs 5700 per quintal on December 9, 2008 to Rs 13400 per quintal on December 28, 2009.

The total turnover of tyre industry covering 36 companies stood at Rs 22500 crore (Rs 225 billion) in FY09.

Automotive Tyre Manufacturing Association is the representative body of automotive tyre sector in India.

On the back of increasing tyre imports from China and increasing natural rubber prices owing to dip in its production, ATMA seeks reduction in the customs duty of natural rubber to 7.5 per cent from present 20 per cent, or alternatively increase the customs duty of tyres from present 10 per cent to 20 per cent.

ATMA also seeks wavier of customs duty on raw materials of tyre industry that were not manufactured domestically.

Further it wants customs duty on Nylon Tyre cord Fabric, PBR and Steel Tyre cord to be slashed from existing 10 per cent to 5 per cent each and on rubber chemicals from present 7.5 per cent to 2.5 per cent; since the domestic production is insufficient to meet the demand.