The tyre industry has asked for duty-free imports of 2 lakh tonne of natural rubber (NR) for 2011-2012 to bridge the gap between demand and supply.
“We estimate the demand-supply gap in domestic natural rubber production and consumption to be approximately 2 lakh tonne in next fiscal (2011-12). Therefore, we want the government to allow duty-free import of natural rubber to the bridge the gap between domestic NR availability and consumption on a regular basis”, Neeraj Kanwar, chairman Automotive Tyre Manufacturers Association (ATMA), said.
ATMA has also sought waiver of customs duty on all raw materials not manufactured domestically. These include butyl rubber, ethylene propylene non-conjugated diene rubber (EPDM) and styrene butadiene rubber (SBR).
Regarding other key raw materials including PBR, steel tyre cord, nylon tyre cord, rubber chemicals and polyester tyre cord, ATMA has suggested lowering of import duties. “The domestic shortfall on these items ranges from 20% to 60%, making imports inevitable”, Kanwar says.
Raw material cost accounts for about 62% of tyre industry turnover and 70% of the production cost. According to ATMA, measures to improve raw material availability need priority. ATMA also urged the finance minister to end “the unfair trade practice of dumping tyres by increasing customs duty on imports.
In the recent years, there has been a large scale import dumping of tyres from China. “Though basic rate of customs duty on tyres is 10%, tyres can be imported at a lower rates of customs duty under various regional trade agreements. For instance tyre imports from China and South Korea account for over 70% of total tyre imports into India since the effective rate of basic customs duty works out to only 8.6%. The truck and bus tyre imports have gone up by around 35 % in 2010-11 over 2009-10 when calculated on annualised basis. In case of passenger car tyres, the imports are up by around 40% during this period.
“We count on the coming Union Budget to jack up the customs duty rates on tyre imports to stop the dumping of Chinese tyres,” says Kanwar.
(Source: http://www.financialexpress.com/news/tyre-cos-seek-2-l-tonne-dutyfree-rubber-import/754457/0)
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