Bangladesh tyre manufacturers reject importers' 'misleading' claims over proposed budget measures

The Bangladesh Tyre-Tube Manufacturers and Exporters Association (BTMEA) has dismissed allegations made by tyre importers over the proposed FY2026-27 budget, describing their claims as "misleading, incomplete and detached from reality."

In a statement issued today (27 June), the industry body said the recent press conference organised by the Chattogram Tyre Tube Importers and Dealers Group presented inaccurate information about the country's tyre industry, proposed fiscal measures and local manufacturers.

The association defended the government's proposal to impose a 20% supplementary duty on imported light truck tyres under HS Code 4011.20.00, arguing that the measure would support industrialisation, protect jobs and reduce foreign currency outflows.

Rising costs driven by global raw material prices

BTMEA said recent tyre price increases were primarily caused by higher global raw material prices and the depreciation of the Bangladeshi taka rather than excessive profit-taking by local manufacturers.

According to the association, international prices of natural rubber increased by around 55% to 72% between 2024 and 2025-26, while synthetic rubber rose by 20% to 30%. Prices of carbon black, nylon cord and bead wire also increased amid higher global commodity prices.

It also noted that the exchange rate had weakened from around Tk107 per US dollar in 2023 to Tk122-123 at present, significantly raising import costs for manufacturers.

The association accused importers of ignoring the impact of these factors while blaming domestic producers for higher prices.

Dispute over tyre lifespan and transport cost

Rejecting importers' claims that light truck tyres last only 30,000-40,000 kilometres, BTMEA said both importers and local manufacturers generally provide warranties of at least 40,000 kilometres for 7.50-16 tyres.

Based on that warranty period, the additional cost resulting from the proposed duty would amount to only Tk8.27 per tyre for every 100 kilometres travelled, or about Tk49.62 for a six-tyre light truck, it said.

The association argued that importers' claim that transport costs would rise by Tk500-Tk800 per trip failed to disclose the actual distance of those trips, making the comparison misleading.

BTMEA also pointed out that the proposed supplementary duty applies only to light truck tyres under one HS code and that no duty increase has been proposed for truck or bus tyres, which account for most freight transport in the country.

Questions over import pricing

The manufacturers' association also challenged importers' claim that 7.50-16 tyres are imported at around $70 per unit.

It argued that a tyre of that size weighs approximately 27.5 kilograms, implying a cost of about $2.54 per kilogram, which it said is lower than the current international market price of natural rubber alone.

BTMEA urged the relevant government agencies to examine imports declared at what it described as abnormally low values.

The association also alleged that tyres imported at the equivalent of around Tk8,610 had been sold in the domestic market for about Tk16,700, and that prices had increased to roughly Tk20,700 even before the proposed budget measures came into effect.

It called on the Competition Commission and VAT authorities to investigate the pricing.

Competition in CNG tyre market

Refuting allegations of monopoly in the 4.00-8 CNG and electric three-wheeler tyre segment, BTMEA said several domestic manufacturers, including RFL Tyres, Apex Hussain Tyre, Rupsa Tyre, Meghna Innova Rubber, Zess Tyre and MTF Tyre, have been producing and marketing the product commercially for years.

It therefore described the importers' monopoly claim as baseless.

Support for VAT changes

The association welcomed the proposed VAT changes on agricultural tyres, saying previous tax policies had favoured importers while domestic manufacturers remained subject to VAT.

The proposed changes would establish a level playing field between imported and locally produced tyres, it said.

Call to retain proposed duty

BTMEA further argued that local tyre manufacturing contributes to foreign currency savings by importing raw materials rather than finished products while generating domestic value addition and employment.

The association said neighbouring countries, including India, Pakistan and Sri Lanka, also protect their domestic tyre industries through higher import duties and other policy measures.

It claimed that local manufacturers have sufficient production capacity to meet national demand for 16-inch light truck tyres and expressed willingness to have products tested by internationally recognised laboratories.

The association urged the government to retain the proposed 20% supplementary duty on imported light truck tyres, saying the measure would strengthen the domestic industry, protect thousands of jobs and encourage further investment.