Indian tyre manufacturers see red in upward Chinese imports

The import of radial tyres— used mostly in heavy commercial vehicles— has increased up to 60% during the last financial year. And a large chunk of imported units were from China, say reports.

The Dollar Business Bureau Tyre Imports Increasing imports of Chinese tyres have become a major concern for the Indian tyre manufacturers.  Reports say that the import of radial tyres— used mostly in heavy commercial vehicles— has increased by 60% in the last financial year. And a large chunk of imported pieces were from China. International trade analysts believe that Chinese tyre makers have started selling their products to Indian buyers at cheaper rates after facing anti-dumping duty imposed by the US. According to reports, the truck and bus radial (TBR) tyres imports in India have surged to 7.8 lakh units in the last financial year from 4.9 lakh units a year ago. This has created an alarming situation for the domestic tyre industry. A steep rise in Chinese imports has fuelled the Indian tyre industry’s long-pending demand to raise import duty on the product. To curb dumping from China, the Automotive Tyre Manufactures’ Association (ATMA) has asked the government to double the import duty on tyres from 10% to 20%. In the past few years, Indian tyre industry has pumped in around Rs. 20,000 crore to boost its manufacturing capacity of radial tyres that are in great demand in the domestic as well as international market due to added quality of fuel efficiency and safety, say reports. Analysts attribute the rising investment to the positive outlook of Indian automobile sector. However, the indigenous tyre makers are not able to use their full production capacity due to intense competition from Chinese suppliers. Besides, free trade agreements (FTAs) with several tyre exporting countries also hamper the growth of Indian tyre industry. Experts are of the opinion that the least the Indian government can do is to make import duty on tyres at par with the rubber imports so as to provide a level-playing field for domestic manufacturers. ATMA has written a letter to the Ministry of Commerce, saying that there seems to be a concerted effort from overseas tyre suppliers to dampen India’s prospect in the radial tyre segment. Tyre makers say that Chinese manufacturers produce almost double than their domestic consumption capacity and lure international buyers by lowering prices compared to other exporting countries. “Imports of tyres have been taking place indiscriminately and at low prices, which in cases of Chinese imports, are even below the cost of raw material. This is causing injury to the domestic tyre manufacturers,” Raghupati Singhania, Chairman of ATMA, was quoted as saying in a report. According to estimates, Chinese radial tyres contribute up to 70% of India’s total tyre imports. In 2014-15, China shipped around 5.5 lakh tyres to India, which was almost three times higher than 1.9 lakh units it exported last year.    

May 30, 2015 | 9:27 pm IST.

The Dollar Business Bureau - May 30, 2015 12:00 IST