Tyre cos seek lowering of import duty on natural rubber

MUMBAI: Indian tyre companies today said that they want the government to reduce import duty on natural rubber and incentivise making of radial tyres in the upcoming budget.

Finance Minister, Pranab Mukherjee is slated to present the Union Budget on February 26.

Leading tyre firm JK Tyre said they also expect the Centre to continue with the stimulus packages for some more time.

"We seek a correction in duty anomaly through reduction in customs duty on natural rubber from 20 per cent to 7.5 per cent. Alternately, we have suggested an increase in customs duty on tyres from the existing rate of 10 per cent to 20 per cent," Automotive Tyre Manufacturers' Association (ATMA) Director General Rajiv Budhraja told PTI here.

Currently, customs duty on natural rubber, the main raw- material for tyres, is 20 per cent, while the customs duty on tyres (the finished product) is 10 per cent, or even lower depending upon preferential or concessional tariff under various regional or bi-lateral trade agreements.

If customs duty on natural rubber is not reduced, an increase in duty on tyres (finished product) would also benefit tyre companies, Budhraja said.

Further, he added that "the government should earmark funds" to incentivise domestic production of radial tyres for trucks and buses.

According to ATMA, rise in radialisation from the present rate of 8-10 per cent to 25 per cent can save fuel worth up to Rs 20,000 crore for the country.