China punctures India tyre

“New capacities, particularly in truck and bus radials (TBR), have been created by Indian tyre manufacturers at an outlay of over Rs 15000 crore in the last couple of years. However, the industry is beset with lower capacity utilisation and low capital productivity in view of surging imports of undervalued and dumped tyres,” said Dr Raghupati Singhania, chairman of Automotive Tyre Manufacturers’ Association (ATMA).

For the period between April and September 2014., TBR import was to the tune of 55000 units per month which against monthly domestic production of 2.5 to 3 lakh units per month.

The import cost of these tyres from China was just about $106 per unit which is even below the cost of raw materials in India.

“The tyre industry being highly capital inte-nsive, the imports are not only threatening to make new investments in capacities idle but also loss of employment, thus running contrary to the concept of Prime Minister’s call of Make in India”, Dr Singhania said in a communication to ministry of commerce and industry.

ATMA alleged that hu-ge surplus capacities in China are abetting dum-ping of tyres in India. In case of Truck and Bus Radials (TBR), China’s manufacturing capacity is 120 million units while its domestic demand is 60 million units leaving 100% surplus capacity over demand.

Citing anti dumping duty on cheap tyre imports from China by countries including the US and Latin American countries like Brazil and Columbia, tyre industry has sought intervention of the government to allow TBR imports only to actual users and to fix a floor price for assessment of duties at a fair and reasonable level.