Atma seeks custom duty waiver on raw materials

The Automotive Tyre Manufacturers Association (ATMA) has asked the government for waiver of customs duty on raw materials, which are not being manufactured in India, to accelerate radialisation of tyres.     

In a pre-budget memorandum, the apex body for tyre makers in the country said the industry needed government support to overcome challenges posed by rising input costs.     

"Being a raw-material intensive product, the impact of input cost increase on tyre industry, particularly in the last 18-24 months, has been significant... for the budget 2009-10, our foremost request is for rationalisation of customs duty on key raw materials to increase competitiveness of the industry, Atma Chairman R P Singhania said in a statement.     

The industry was facing challenges of demand slowdown, coupled with significant increase in tyre imports with cheap Chinese products being dumped into the country, he added.     

A number of raw materials used by tyre industry, including styrene butadiene rubber (SBR), butyl rubber and polyester tyre cord, are not manufactured in the country and are only imported.      "Polyester tyre cord is used for the manufacture of radial tyres.

Atma estimates that increase in radialisation level in the truck and bus tyre segment from current 5 per cent to 25% can result in annual and recurring fuel saving of over Rs 20,000 cr," Singhania said. 

    
Waiver of customs duty on these raw materials would go a long way in accelerating the pace of radialisation in the country, he added.     

Besides, Atma has also asked for immediate removal of anti-dumping duty on SBR, which is not manufactured in India.     

"In case of other raw materials where the domestic production is grossly insufficient to meet the entire demand of tyre industry, Atma has urged reduction in customs duty on these raw materials as imports is a necessity," it said.