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    Here’s what tyre makers demand from Union Budget 2021

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    Here’s what tyre makers demand from Union Budget 2021

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    Rubber industry bounced back after tyre and footwear industry saw a pick-up. Further, restriction and duties on imported tyres could propel the sector. However, the incremental tyre demand generated in fiscals 2021-2024 could be insufficient to absorb the new capacities created in current capex cycle is what the industry is worried about. The tyre sector is demanding the government to improve natural rubber availability and fix the demand-supply deficit of key raw materials.

    Rubber industry bounced back after tyre and footwear industry saw a pick-up. Further, restriction and duties on imported tyres could propel the sector. However, the incremental tyre demand generated in fiscals 2021-2024 could be insufficient to absorb the new capacities created in current capex cycle is what the industry is worried about. The tyre sector is demanding the government to improve natural rubber availability and fix the demand-supply deficit of key raw materials.
    As the Union Budget provides the government with the opportunity of sectoral reforms, here is what the tyre industry is looking for. Rajiv Budhraja, Director General of Automotive Tyre Manufactures Association, told CNBC-TV18, "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."
    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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