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Our Bureau

New Delhi, Feb. 3 Higher raw material prices compared to the cost of importing finished products have compelled the Indian tyre industry to seek a correction in the inverted duty structure and a waiver on certain raw materials not manufactured locally in the upcoming Budget.

Amidst concerns of losing ground to countries such as China and South Korea that currently contribute to about 60 per cent of overall passenger car tyre imports and 80 per cent of commercial vehicle tyre imports, the domestic industry has asked the Government to take measures that would make it competitive in the global markets.

Customs duty on imported tyres has seen a sharp fall from 50 per cent in 1996-97 to the present level of 10 per cent as against duty on natural rubber which remains unchanged at 20 per cent.

In its pre-Budget memorandum, the Automotive Tyre Manufacturers Association (ATMA) has demanded a reduction in customs duty of natural rubber from 20-7.5 per cent, which is slightly lower than tyres, and an increase in duty of tyres to 20 per cent.

Citing raw materials such as polyester tyre cord, styrene butadiene rubber tyre grade, and bromo butyl that are not manufactured in the domestic market and attract a 10 per cent customs duty, ATMA has said: “The tyre industry seeks waiver in customs duty on raw materials not manufactured domestically and customs duty reduction to a level lower than tyres on key raw materials of the tyre industry.”

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