India’s ATMA Seeking 7.5% Natural Rubber Duty

India’s national budget is due to be delivered on July 6, and the nation’s tyre manufacturers are hoping that a sought after reduction in natural rubber duty will be forthcoming. “As in the past we are looking forward to the correction of the inverted duty structure,” said Rajiv Budhraja, director-general of India’s Automotive Tyre Manufacturers Association (ATMA). “That is the first and foremost demand.”

According to a Reuter’s news brief, the ATMA has requested the government reduce the customs duty on natural rubber to 7.5 per cent; previous news reports indicated the ATMA was seeking a 10 per cent duty. Regardless of the desired rate, the association’s goal is to provide manufacturers some relief from what is seen as an unfair tax structure. While natural rubber currently attracts a customs duty of 20 per cent, the tax on imported finished tyres is only half that.

“We are also looking at increasing the customs duty on tyres,” Budhraja told Reuters. “There are also some raw materials which are not domestically manufactured or they are not in adequate supply. We are looking at some duty corrections there.” These materials include butyl rubber, styrne butadiene rubber and tyre manufacturing machinery, all of which attract a duty of between five and ten per cent. The ATMA seeks the removal of duty from these items.

Without quoting a source, Reuters states that China and South Korea account for 80 per cent of India’s total tyre imports. “While domestic tyre industry is moving ahead with significant investments in radial truck and bus tyre capacity, dumping of tyres from China results in unfair competition to the Indian tyre industry,” the ATMA comments.