Latest News | Hike in Customs Duty on Compounded Rubber Will Lead to Rise in Production Cost: ATMA

New Delhi, Feb 1 (PTI) Automotive Tyre Manufacturers Association on Wednesday expressed concern over the hike in basic customs duty on compounded rubber announced in the Union Budget, saying the increase will lead to a rise in the cost of production and affect price competitiveness.

The association also urged the government to reconsider it.

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In the Budget 2023-24, Finance Minister Nirmala Sitharaman said the basic customs duty rate on compounded rubber is being increased from 10 per cent to '25 per cent or Rs 30/kg whichever is lower', at par with that on natural rubber other than latex, to curb circumvention of duty.

"The enhancement of duty on compound rubber has come as a matter of concern for the industry," Automotive Tyre Manufacturers Association (ATMA) Chairman Satish Sharma said in a statement.

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As such, India is deficient in rubber production, both natural and synthetic, he added.

"In fact, natural rubber in India attracts the highest rate of duty of 25 per cent despite the fact that there is a wide gap between demand and availability and imports are inevitable. The increase in duty will lead to an increase in the cost of production and affect price competitiveness," Sharma said.

In the interest of Make in India, he said, "The increase in duty on a key raw material in which India is deficient needs reconsideration".

Yet, ATMA said the tyre Industry welcomes the capex push announced in the Budget.

"The budget is a growth-oriented one and will impart a definitive push to the growth trajectory of the economy. Especially the significant 33 per cent hike in the capex outlay at Rs 10 lakh crore, the highest ever, will be a boost for all segments of the industry, including the tyre sector which, as wheels of the economy, is tied to the economic growth directly," Sharma said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)