Tyre Industry is highly raw-material intensive. Raw materials cost accounts for approx. 63% of tyre industry turnover and 72% of production cost

Given below is the composition of raw-materials as a percentage (%) of Total Raw Material Cost:

62% of total Natural Rubber consumption is by the Tyre Sector, balance by rubber based non-tyre industries.

Total weight of raw-materials consumed by tyre industry – 15.50 Lakh M.T.

Total Cost of Raw Materials consumed by tyre industry – Rs.16,000 Crores

• No domestic Production of Butyl Rubber and Styrene Butadiene Rubber of tyre grades, i.e., 1502 and 1712.
  Production of Nylon Tyre Cord Fabric, Polybutadiene Rubber, Rubber Chemicals, Steal Tyre Cord, Polyester Tyre Cord insufficient to meet domestic demand.
• Tyre industry imports raw materials on account of the following factors:
  
  
  1. duty-free imports permitted against export of tyres;domestic demand not sufficient to meet complete requirement;technical and commercial considerations;
  2. business strategy to have multiple sources of supply.