Anti-dumping duty on Thai, Chinese tyres

On a complaint filed by domestic tyre companies and subsequent investigation, the Union government has slapped a provisional anti-dumping duty (ADD) on tyres imported from China and Thailand, with effect from October 9.

Over three lakh imported tyres, brought in mainly from China for the commercial vehicle (CV) segment, are sold in India annually. Domestic manufacturers sell over 10 million tyres.

A notification, issued by the Ministry of Finance and valid for six months, will see a levy of duties at the reference price of $99.10 for a complete tyre set "" comprising a tyre, tube and rubber flap "" having a rim diameter over 16 inches.

The earlier reference price on which duties were imposed on imported tyres was around $39. The imported tyres invite 37.1 per cent multiple import duties, including 16 per cent countervailing duties (CVD).

Owing to their massive price advantage, the sale of imported tyres has doubled over the years in India and is growing. Industry insiders said a pair of imported CV segment tyres cost around Rs 17,000, in comparison with the Rs 24,000 of those produced by Indian companies.

The Automotive Tyre Manufacturers' Association (ATMA), representing Indian companies and the principal complainant in the anti-dumping case, said Chinese and Thai companies were selling their products at artificially low prices.

D Ravindran, director general, ATMA, said, "The Indian companies were losing market turf due to these low-quality imported tyres dumped at cheap prices. Now with the ADD, some check will be ensured."

However, S P Singh, convener, All India Tyre Dealers' Federation, respondent in the anti-dumping proceedings, said: "We are contesting this ADD with the Directorate General of Anti Dumping and Allied Duties (DGADAD). We, along with some tyre importers and China-based exporters, will file a rejoinder on October 17, saying that the levy of provisional duty should be reversed by the government and customers be given the choice of a free market."

Industry experts said there might not be much change in the tyre market even after the ADD, given the price difference of over 30 per cent between imported tyres and those domestically manufactured. The ADD will see an increase of around 8 per cent in the price of imported tyres, which comes to about Rs 1,000.

The provisional duty valid for six months could be followed up with a regular ADD notification, depending on the investigations being carried out by the DGADAD. A regular ADD notification will be valid for five years from the date of issue.