Tyre prices may go up by 2 percent

The 2 percent hike in excise duty announced last week may lead to an increase in tyre prices sometime soon. According to Mr AS Mehta, Director – Marketing, JK Tyres, it is only a matter of time before the increased excise duty is passed on to consumers. The tyre industry is disappointed with the budget, said Mr Rajiv Budhraja, Director General of the Automotive Tyre Manufacturers Association (ATMA). The ATMA had demanded a cut in import duty on natural rubber from 20 percent to 10 percent, and an increase in the import duty on tyres, which is currently only 10 percent. Neither of these demands has been met in the budget.

There may also be an additional increase in tyre prices due to the increasing costs of natural rubber, which have gone up by 100 percent over the past one year. Tyre prices were increased by 3-7 percent hike in January this year, and a further increase may hurt the industry.