Cheap imports derail tyre industry

MUMBAI: Hit by the slowdown in exports, the Rs 20,000-crore domestic tyre industry is battling other issues like fall in production of commercial vehicles and cheap imports from China. The Director General of Foreign Trade (DGFT) has placed imports of ‘radial’ truck and bus tyres in the restricted category to check imports. However, the industry has voiced its fears that unscrupulous traders may import these products, classifying them as ‘bias’ truck and bus tyres.



Both radial and bias tyres look identical. But radial tyres are preferred for their technology, which leads to long tyre life, resistance to cuts and punctures, good traction and fuel economy. Since there was anti-dumping duty on bias tyres, imports on radial tyres increased significantly. In July 2007, the government imposed anti-dumping duty on bias tyres, which led to a steep increase in import of radial tyres.



In its notification dated November 24, 2008, the DGFT placed radial truck and bus tyres, along with other select items, in the restricted category to check surging imports, especially from China. Automotive Tyre Manufacturers Association (ATMA) director general Rajiv Budhraja told ET that they will be making a representation to the government in coming weeks to make out a case placing in the restricted list import of bias truck and bus tyre and passenger tyres, along with the radial category.



Truck and bus tyres account for 65% of the industry turnover. According to Directorate-General of Commercial Intelligence and Statistics( DGCI&S), in 2007-08, of the total bus and tyre imports into the country, 90% of imports were from China. According to Mr Budhraja, a majority of these imports are illegal. These traders resort to malpractices to evade levies. JK Tyre marketing director AS Mehta said the government should have kept all the truck tyres under the restricted list. He said the import of radial tyres from China discourages creation of fresh radial production technology.



According to Mr Budhraja, a significant percentage of passenger car tyre imports are also being dumped at low prices, particularly from China. “Such imports result in long-term and irreversible damage to tyre companies and can be checked by inclusion of passenger car tyres in the restricted list,” he adds.