COVID-19: Govt Likely To Put Import Restrictions On Tyres

Tyre imports from China in the April – January period grew to 20 per cent to 3.2 million units in FY20.

The government is considering a proposal to put import of tyres under the restricted category, from the current free category to promote domestic manufacturing, according to sources. Putting restrictions will mean the importer will have to seek a licence for inbound shipments.

In the third week of March, the Directorate General of Foreign Trade had sought the views of the Department for Promotion of Industry and Internal Trade (DPIIT) on the matter as domestic tyre manufacturers have long been demanding restrictions on imports, the sources said.

Tyre imports from China in the April – January period grew to 20 per cent to 3.2 million units in FY20.

However, the sources added that given the disruption in the global supply chain due to the COVID-19 outbreak, it is very unlikely that the DPIIT would agree on the proposal.

The Auto sector has a moderate dependency on China for imports with an overall 18 per cent of automobile component imports and 30 per cent of tyre imports.

Wuhan the epicentre of the coronavirus epidemic in China, is a large Auto hub with not only OEMs but a large number of part manufacturers supplying parts to many tier 1 manufacturer and OEMs in India – many players started to feel the impact of COVID-19 in India in January itself with parts not reaching on time.