What Do Tyre Industries Demand From Union Budget 2021?

It is safe to state that the rubber industry has bounced back into the business and evaded the Corona Virus effect as the tyre and footwear industry saw a pickup in operations. Furthermore, the restriction and duties laid on imported tyres could help the rubber industry.

However, the positive increase in the demand for tyre generated in the fiscals 2021-2024 could be not enough to face the new capacities created in the current Capex cycle according to few tyre industries. The tyre industries are demanding the Indian Government to improve the availability of natural rubber and create a solution to the deficit in the "demand-supply" of raw materials.

Also See: Tyre Import Restriction Affects Small Traders In India

Rajiv Budhraja, Director General of Automotive Tyre Manufacturers Association says that "On the natural rubber side we don’t see an immediate relief because as we know rubber is a long gestation plant, it takes seven years for the rubber plantation to come in. In recent years there has been hardly any planting or re-planting activity that has happened in India so whatever we were to do now will yield results seven years down the line."

He said, "For improving today's situation we should have taken steps 5-7 years back. So, I am afraid our dependence on the import of rubber to the extent of anywhere between 30-50 per cent of our requirement will continue to be there in the foreseeable future."

Also See:VIP Records Largest-Ever Donation To Make-A-Wish

He added that the inverted duty correction has been part of the agenda in the rubber sector. "This is probably one of the very few, at times we feel this is the only sector, where the key raw material is at almost more than twice the duty versus the finished product. This is one of the very strongest demand of the tyre industry to have this duty correction by way of reducing the duty on rubber."

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