Hailing the increased allocation for infrastructure and road sector in the Budget, the tyre industry has expressed concern over exclusion of rubber and tyres in the list of items on which duty inversion has been addressed.

“A big push to the infrastructure spending is a big positive for the automotive tyre sector as the growth in tyre is closely linked to the growth in economy. Infrastructure investment means more movement of goods and that translates in increased demand for tyres especially commercial vehicle tyres. Increased allocation for the National Highways to ₹64000 crore will also aid the tyre sector”, K.M. Mammen, Chairman, Automotive Tyre Manufacturers Association (ATMA) said.

However the tyre industry was pinning high hopes on long pending correction of inverted duty on natural rubber. Regrettably, tyres or rubber have not been included in the list of items where duty inversion has been addressed. Correcting inverted duty on rubber is important to increase competitiveness of the tyre sector. Currently the import duty on natural rubber is 25 per cent while the duty on import of tyres is just one third at around 7 per cent, he said.

Non-tyre rubber industry in India largely comprising MSMEs has welcomed the move to reduce corporate tax for Micro, Small & Medium Enterprises which it feels will help the industry face the challenging period it is passing through.

Reduction on income tax for MSMEs from 30 per cent to 25 per cent is a highly positive move. After demonetisation, MSMEs which are largely cash dependent have been reeling under stress. Relief in the corporate tax has not come a day too soon, said Kamal K. Chowdhury, president, All India Rubber Industries Association.

However rubber MSMEs have also expressed concern over the fact that the inverted duty on rubber has not been addressed. “In view of the government’s emphasis on domestic manufacturing, we were hopeful that inverted duty will be corrected. However our hopes have been dashed again, Chowdhury said.

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