The tyre industry has raised its concern over the deficit in natural rubber, saying “the gap between production and consumption is not showing any signs of bridging”.

Expressing concern over the fresh production data released by Rubber Board for the first half of the current fiscal, Satish Sharma, Chairman, Automotive Tyre Manufacturers Association (ATMA), said the deficit last year was 40 per cent. The gap in the first half of this fiscal remains at the same level.

The industry consumes 65-70 per cent of the country’s rubber output. For 2017-18, the Rubber Board had projected the production at 8 lakh tonnes (lt), up 16 per cent over previous year’s 6.9 lt. However, in the first half of 2017-18, the production was only 3.2 lt, growing 5 per cent over the previous period.

To achieve the target of 8 lakh tonnes, production needs to grow at 24 per cent in the second half over the year- ago period which, according to ATMA, looks unlikely.

Supply crunch

The tyre industry is facing acute rubber scarcity even in the ongoing peak season. It has also been paying more for the domestic rubber than for imports. The tyre industry faces a serious threat of disruption, Sharma added. According to ATMA, rubber imports attract 25 per cent duty, which is the highest in the world, and adds to the cost. Yet, there is no option but to import.

The industry asked for imports on a tariff rate quota (TRQ) basis at ‘nil’ duty to the extent of the gap between domestic production and consumption. It also asked for removal of the restriction of imports only via Chennai and JNPT; this adds to the cost and delays.

ATMA called for a correction in the ‘inverted duty structure’ as effective customs duty on tyres ranges between 0 and 8.6 per cent vis-à-vis the basic duty in India at 25 per cent.

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