Indian tyre industry trends today
In India, import duty on rubber is one of the highest. The government has chosen to avoid concessions and reductions related to manufacturing while stressing on development of roads, infra and skilled labour. Indian tyre industry is remains keen on correction in inverted duty structure. Tyres being raw material intensive, and natural rubber being in short supply here, rubber imports are a necessity to meet domestic demand.
Tyre dealers urged the government to reconsider 10 pct import duty. Tyre manufacturers anticipate growth and expect to fare well in the new financial year. Ongoing key Indian tyre industry trends point to price cuts introduced by all leading tyre companies .
Rubber industry in India has been growing in significance. Natural rubber (NR) production in India decline stood at 41.67 pct to 63,000 tonnes during December 2014 (PY 08000 tonnes).
In the first nine months of FY2014-15, natural rubber imports in India increased by 24.89 pct owing to to drop in production in India, and lower prices in the world market, prompting tyre makers to increase overseas purchases to meet rising demand.
Rubber price is under pressure in international and domestic market owing to poor demand from countries like China, and oversupply of the commodity. Raw material scarcity is a big issue for the Indian tyre industry. As import duties are high, cost of production is also high. Increased automobile use due to lower fuel price fosters increase in demand for replacement segment tyres. Synthetic rubber can be produced from petroleum waste. Natural rubber price, the main raw material is also linked to crude oil prices.