Tyre Industry laid flat

Increase in import duty on Rubber to affect tyre industry

The increase in customs duty on Natural Rubber from 35% to 70% will make rubber imports prohibitive for the tyre industry. Nevertheless, as most of the natural rubber imports is duty free import against tyre exports, the adverse effect is substantially mitigated.

Further, the reduction in duties on tyre industry's other raw materials like SBR, PBR, Carbon Black and Steel tyre cord will benefit the industry.

As tyre industry consumes about 48% of the natural rubber, it was virtually dictating terms to the domestic rubber manufacturers. Now, its fetters are severely curbed through doubling of import duty on natural rubber. Overall, the impact of the budget on the tyre industry is negative.

'Budget has disappointed the Tyre industry'

Raghupati Singhania, Chairman, Automotive Tyre Manufacturers Association & managing director, JK Industries

The budget addresses some of agricultural reforms and infrastructural issues. Amongst others, the positive factors include higher allocation of Government Expenditure on infrastructural projects including the road sector as also additional allocation for all-weather road network in rural India. However, it does not address second generation reforms.

As far as the Tyre industry is concerned, it is disappointed in as much as, that the high incidence of taxes on tyres has not been reduced, despite the fact, that tyre is a critical input for the vital road transport sector in India.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
The Rediff-Capital Market Budget Analysis
More Budget Stories
Money