The domestic and foreign entrepreneurs are not investing in the tyre industry which is largely import dependent and has a market value of Tk5,000 Crore. This is due to lack of policy support and raw material crisis.
About 90 per cent of the annual demand is met by imports of roughly 25 lakh tyres according to industry insiders. 2 companies from India and China made investments but later it was withdrawn in bid to set up factories 6 to 7 years ago.
Entrepreneurs stated that the domestic demand is too low for required investment of Tk1,500 Crore. There is a lack of supply of raw materials like carbon, rubber, different chemicals and yarn. They also stated to The Business Standard that this increases their production costs by 25 to 30 per cent compared to China and India which is why importing finished products are more appealing when the import duty on it is 10 per cent.