Far reaching and adverse consequences – India’s ATMA on higher rubber duty

The association representing India’s tyre makers has expressed its opposition to a government decision to increase import duty on rubber. In a statement, Automotive Tyre Manufacturers Association Anant Goenka said any such decision “will have far-reaching and adverse consequences on tyre industry and its long-term impact will be felt on the entire value chain of rubber sector.”

The ATMA believes increasing the duty will adversely impact the tyre industry at a time when the important segments of India’s automotive industry are experiencing negative growth, a phenomenon that ultimately means lower demand for tyres.

The chasm between domestic production and consumption of natural rubber in India came to more than 60,000 tonnes during the last fiscal year, and this year the ATMA anticipates a 50,000 tonne shortfall. Like-for-like, duties on imported rubber work out to be much higher than those for imported tyres, which are no more than ten per cent – thereby given imported brands an advantage over domestic tyre makers.