Mumbai: Tyre manufacturers want rubber import duty to be cut in the forthcoming Budget. In the present inverted duty structure, rubber which is a key raw material in the manufacturing of tyres, attracts a higher duty than the finished product itself.
Tyre makers want the 20 per cent duty on rubber imports to be slashed to 7.5 per cent to prevent dumping of tyres from China and other countries, Automotive Tyre Manufacturers Association (ATMA) said in a statement.
Presently, tyres carry an import duty of 10 per cent, which was cut from 12.5 per cent in the last Budget.
"It's time to correct one of the last remaining inverted duty structures in our economy," Onkar Kanwar, Chairman Apollo Tyres Ltd, said.
"It is cheaper to import a finished product into India, than manufacturing it here, putting domestic industry at a significant disadvantage. Natural rubber alone makes up 42 per cent of the cost of a tyre. In the Union Budget 2007-08, peak rate of customs duty was reduced from 12.5 per cent to 10 per cent on non-agricultural goods except natural rubber," he said.
For long, tyre manufacturers have been pressing for duty cuts because rubber prices have been steadily increasing. An eight per cent growth in demand is set to outstrip domestic production which is expanding at 3-4 per cent, ATMA further said.
The Association also wanted a waiver of customs duty on butyl rubber, polyester tyre cord, styrene Butadiene Rubber and Bromo Butyl as these were not made locally.
There are 43 tyre firms producing tyres worth Rs 19,000 crores annually in the country.
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