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The widening gap between the domestic production and consumption of natural rubber has led the Automotive Tyre Manufacturers Association (ATMA) to express concern. As per ATMA, rubber production and consumption gap for the current fiscal year (2018-2019) is currently projected at 4.7 lakh tonnes, which is a historic high. ATMA has urged the Indian Government to take urgent measures by making imports easier, thereby making rubber available to the tyre industry.<\/p>\n
Since the domestic production is projected to be 40 percent short of the requirement, it will hit the tyre industry as the industry has made investments to grow in parallel with the growth in the auto industry. Rajiv Budhraja, the Director General of ATMA, has told media that the dependence of the industry on imports will further go up in order to meet the domestic requirement.<\/p>\n
The Indian tyre industry is facing a serious crisis due to heavy taxation imposed by the government on rubber imports and is bearing the brunt to keep the industry running. Currently, in India, the customs duty is fixed at 25 percent higher than the rate of duty imposed in other countries. Also, the imports are only permitted at two designated ports only \u2013 Jawaharlal Nehru Port (Mumbai) and Chennai Port. This is further adding up to the landed cost and logistics time for tyre manufacturing companies.<\/p>\n
The industry has met with further roadblocks in accessing rubber easily. It needs to adhere to the pre-import condition for import against export obligation. Also, the export period for tyres has been decreased to 6 months from 18 months, thereby making it tough to access raw material which is already in short supply.<\/p>\n
ATMA has also urged the Ministry of Commerce and Industry for duty-free import equivalent to the domestic deficit as high import duty is hurting the tyre industry. It has also asked for the import of rubber on a tariff rate quota (TRQ) basis at \u2018nil\u2019 rate of duty to the extent of the gap between the domestic production and consumption. The association has also asked for the removal of port restrictions and other restrictive measures to make the playing field even for the domestic industry with regard to the international industry.<\/p>\n