India witnesses an upswing in truck and bus radial tyres import

Indian tyre majors ask for anti- dumping duty on import of truck and bus radial tyres from China

Imports of truck and bus radial tyres (TBR) grew by nine per cent touching a new high of 120,000 units per month in the financial year 2017. Imported tyres now account for 40 per cent of the replacement demand for truck and bus radials in India. This has come as a severe blow to the domestic tyre industry which has put in hefty investments in TBR manufacturing.
 
Meanwhile, Automotive Tyre Manufacturers Association (ATMA) has asked the Ministry of Commerce and Industry for early imposition of anti dumping duty on import of truck and bus radial tyres from China, which account for 92 per cent of TBR’s import into India. ATMA is a representative body of 11 large tyre companies in India accounting for over 90 per cent of tyre production.

 
TBR import in India has been growing steadily over the last few years. According to ATMA, TBR import has increased from  40,000 units a month in financial year 2014 to about 120,000 units per month in financial year 2017. The TBR import has witnessed a staggering growth of 200 per cent in the last three years.
 

It may be noted that tyre majors have invested about Rs 35,000 crore in the last three to four years towards setting up TBR capacities.
 
“TBR has emerged as the growth driver for the industry. Unfortunately, indiscriminate import has queered the pitch for domestic tyre sector. With expansion in capacity for TBR, the capacity utilisation levels have come down to 60-65 per cent from 80-85 per cent three years ago”, said Satish Sharma, chairman ATMA, who is also the president – Asia Pacific, Middle East and Africa for Apollo Tyres Limited.

 
ATMA says as much as 60 per cent of the TBR import is being contracted by small private operators and traders who indulge in unfair practices such as under invoicing and sell the tyres in cash thus depriving the exchequer of its revenue. “Demonetisation sucked away the unaccounted cash from the system leading to a significant drop in import of tyres. However with remonetisation, the imports have made a serious come back,” said Sharma.
 
China accounts for more than 90 per cent of TBR import. China's share in the import pie has increased from 40 per cent in financial year 2014 to 92 per cent in financial year 2017.

 
ATMA has alleged that most of the TBR import from China is being dumped into India as TBR export prices from China are significantly lower than the prices of such tyres in Chinese domestic market and lower than similar exports originating from countries such as Thailand and South Korea. The per unit import price from China is even less than the cost of raw materials that go into making of these tyres.
 
While import duty on natural rubber is 25 per cent in India, import of tyres from China attracts just seven per cent duty which is encouraging imports of tyres.

 
Dumping of TBR tyres at such a large scale is also adversely affecting the interests of rubber growers in India. Truck and bus tyres are primary consumers of domestic natural rubber. However, with domestic demand for tyres being increasingly met by Chinese imports, the offtake of natural rubber by tyre industry is getting impacted significantly.