ATMA Seeks Policy Support to Address Supply Chain Worries

Why It Matters

Without expanded duty relief, tyre manufacturers face rising input costs and potential production slow‑downs, which could translate into higher vehicle prices and reduced competitiveness for the Indian automotive sector.

Key Takeaways

• ATMA secured temporary duty exemption on synthetic rubber until June 30.
• Raw material duties remain on polyester, bead wire, steel cord, carbon black.
• Crude-linked inputs represent 60‑70% of tyre manufacturing costs.
• Shipping disruptions raise freight, insurance costs for tyre producers.
• ATMA seeks QCO exemption for bead‑wire imports to avoid delays.

Pulse Analysis

The tyre sector is feeling the ripple effects of geopolitical tension in West Asia, where the Strait of Hormuz and the Suez Canal—two arteries for crude oil and petrochemical shipments—are experiencing congestion and occasional closures. Volatile crude prices have pushed the cost of synthetic rubber, carbon black and processing oils upward, while freight and marine insurance premiums have surged by double‑digit percentages. For manufacturers that rely on imported feedstocks, these dynamics compress margins and force a reassessment of sourcing strategies, especially in markets like India where tyre demand is expanding rapidly.

Against this backdrop, ATMA’s push for broader customs‑duty relief is a pragmatic response to a cost structure where crude‑linked inputs represent 60‑70 % of total raw‑material expenses. The temporary exemption on synthetic rubber and select resins, effective until June 30, offers a short‑term buffer, but the association argues that similar relief should extend to polyester‑nylon cord, bead wire, steel cord and carbon black to prevent a cascade of price hikes. Additionally, a waiver of the Quality Control Order for bead‑wire imports would alleviate a bottleneck that threatens tyre safety compliance and production continuity.

If the government expands duty concessions and eases import controls, tyre makers can maintain competitive pricing and avoid passing costs onto automakers and consumers. Conversely, sustained import duties could erode profit margins, prompting manufacturers to shift production overseas or delay capital investments in new rubber compounds. Securing reliable supplies of sulphur, refinery‑derived process oils and high‑value polymers will also be essential for long‑term resilience. Policymakers therefore have a clear incentive to align trade measures with the broader goal of stabilising India’s automotive supply chain and supporting its export ambitions.