Indian Government May Offer Fuel-Efficient Incentives

The Indian government is pondering whether to offer fiscal incentives to popularise fuel-efficient radial tyres for trucks and buses, the country’s news media is reporting. It is thought that the tyres could save automotive fuel worth 200,000,000 rupees (2.4 billion pounds sterling) annually. The package would include exemption from excise duty, a reduction in import duty on machinery and a concessional VAT rate for a ten-year period.

By doing so, the Indian government would hope to increase the manufacturing of radial tyres within India, and boosting its market share to 25 per cent. The current level is between 4 and 5 per cent, an official in department of industrial policy and promotion told The Economic Times. The Automotive Tyre Manufacturers’ Association has demanded the incentive package that would reduce the cost of radial tyres by 30 per cent, added the source.

“Radial tyres offers great economy and offers a huge reduction in operation cost, but the market is dominated by the cheaper nylon tyres,” stated ATMA chairman and JK Tyres managing director Raghupati Singhania. “We have asked the government to support the domestic industry to transit to radial tyres, which, like the passenger car segment, can play a big role in saving fuel and bring down the cost of operations.”

A senior government official also stated that, “With the rapid changes in infrastructure landscape of the country, faster radialisation of commercial vehicles tyres will help in substantial savings. However, the domestic industry needs support to achieve size and scale of operations and become economically viable on the global scale to compete with cheaper radial tyre imports from China, Thailand and other countries.”