New Delhi: The domestic tyre industry has expressed concern over the move of the Rubber Board to promote exports of natural rubber. This concern has been expressed on the heels of projections of a three per cent drop in rubber production by the end of current fiscal. Run-up to Budget 2008-09
The tyre industry, which consumes 55 per cent of the natural rubber produced in the country, is worried that the exports would affect the availability of natural rubber at a time when it is not able to meet domestic demand.
Expected growth
“Production of natural rubber in the fiscal 2007-08 is expected to go down by 3 per cent, while consumption would grow by 5 per cent. Of this, consumption by the tyre industry is expected to increase by 6.6 per cent and non-tyre consumption by 3 per cent. In such a scenario, we would like the Government to encourage domestic consumption as against exports,” said Rajiv Buddhiraja, Director-General, Automotive Tyre Manufacturers Association.
According to him, the Rubber Board, which has set a target to export 46,000 tonnes during the current fiscal, has so far exported 30,000 tonnes of natural rubber and plans to export 16,000 tonnes during February and March.
The lack of availability of natural rubber compels the tyre industry to import it at a custom duty of 20 per cent.
This is expected to impact the margins of the tyre industry as 42 per cent of the overall cost is owing to natural rubber prices.
“The duty on raw material at 20 per cent being higher than the import of tyres at 10 per cent is a huge concern. With the rubber growers resorting to exports, we would like the Government to allow the duty-free import of rubber,” said Buddhiraja.
The tyre industry, which consumes 55 per cent of the natural rubber produced in the country, is worried that the exports would affect the availability of natural rubber at a time when it is not able to meet domestic demand.
Expected growth
“Production of natural rubber in the fiscal 2007-08 is expected to go down by 3 per cent, while consumption would grow by 5 per cent. Of this, consumption by the tyre industry is expected to increase by 6.6 per cent and non-tyre consumption by 3 per cent. In such a scenario, we would like the Government to encourage domestic consumption as against exports,” said Rajiv Buddhiraja, Director-General, Automotive Tyre Manufacturers Association.
According to him, the Rubber Board, which has set a target to export 46,000 tonnes during the current fiscal, has so far exported 30,000 tonnes of natural rubber and plans to export 16,000 tonnes during February and March.
The lack of availability of natural rubber compels the tyre industry to import it at a custom duty of 20 per cent.
This is expected to impact the margins of the tyre industry as 42 per cent of the overall cost is owing to natural rubber prices.
“The duty on raw material at 20 per cent being higher than the import of tyres at 10 per cent is a huge concern. With the rubber growers resorting to exports, we would like the Government to allow the duty-free import of rubber,” said Buddhiraja.
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