What does Budget 2009-10 mean for the Indian tyre industry?
Budget 2009-10 has failed to address the long pending anomaly of an inverted duty structure. Customs duty on natural rubber, the principal raw material for the tyre industry is at 20%, whereas the duty on tyres (finished product) is 10%, or even lower, under regional trade agreements. The current price of natural rubber in India, at Rs 97-100 per kg, is higher by Rs 15-20 per kg than the corresponding international natural rubber price. Coupled with higher domestic price is the issue of extremely tight natural rubber availability domestically. In such a scenario, the inverted duty structure only adds to the woes…
