Modi Government imposed Anti-Dumping Duties on Chinese Tyres
Published On 2017-09-22 16:13:38 2468 views
“The imposition of ADD would pave a level-playing field for the tyre makers to compete”
After series of recommendations from industry experts, Modi government finally imposed a 5 year Anti-Dumping Duty (ADD) on import of Chinese tyres, thus bringing an end to a row of months of speculations.
The ADD would be levied on import of Truck and Bus Radial tyres (TBR) from China, for a period of 5 years, with effect from September 18th,2017. The duty has been slapped on radial tyres, tubeless or tube-type, having rim diameter of 16” or above and being used in buses and trucks/lorries.
Slapping this duty came in the wake of a recommendation from Directorate General of Anti-Dumping and Allied Duties (DGAD), which, in the first place, was requested by leading brands like Apollo Tyres, J.K tyres and CEAT, to investigate the dumping of low cost Chinese tyres in the Indian markets.
These companies, along with other members of Automotive Tyre Manufacturers’ Association (ATMA), pointed towards the losses being born by Indian tyre manufacturers on account of these budget Chinese tyres. The imposition of ADD would pave a level-playing field for the tyre makers to compete.
Mr. Subrata Ray, Sr. Group Vice President, ICRA, said, “ With sizeable investments made in recent years towards creation of TBR capacities on the back of healthy long term domestic demand potential for radial tyres, rising imports had an adverse impact on industry capacity utilisation levels. With imported Chinese TBRs priced lower than domestic Truck and Bus bias (TBB) tyres, these imports made heavy inroads into the Indian T&B replacement market, eroding TBR volumes for Indian players.”
He added, “ The aggressive pricing of Chinese TBR tyres limited the competitiveness of domestic players, compounding the problem of lower rubber (raw material) prices. With the re-imposition of ADD by India and the USA ruling out ADD on Chinese tyres in February 2017, Chinese imports will become costlier, levelling the playing field for Indian T&B tyre manufacturers. We expect this will positively benefit large Indian truck tyre manufacturers.”
Tyre imports have been witnessing a CAGR of 10% in the last three years, and accounts for 7% (in value terms) of the domestic tyre industry. Out of these imports, TBR imports accounted for a considerable 43%, increasing from Rs 710 crores in FY2013 to Rs. 1420 crores in FY2017.
A striking reason for this surge in imports can be accounted to the USA’s Imposition of ADD on Chinese tyres in 2015 and the subsequent removal of ADD on such imports by the Indian government.