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Truck, radial tyres imports up 40 per cent during April-June quarter.

Date: 22-07-2016
Subject: Truck, radial tyres imports up 40 per cent during April-June quarter
NEW DELHI: India's imports of radial tyres continued to grow in the fiscal first quarter despite a slowdown in the pace, driving local manufacturers to increase the pitch against what they called dumping by China and demand for a safeguard duty on supplies from abroad. Imports of truck and bus radial (TBR) tyres surged 40% during April-June, while those of passenger car radials increased 22%, the Automotive Tyre Manufacturers Association said. According to the industry body, dumping of radial tyres has reached unprecedented levels. Tyre dealers, however, said they are against any move to ban imports or impose a new duty, and cited "overpricing" by the local manufactures for the increased imports.

Imports of TBRs reached 1.5 lakh units a month from an average 1lakh units in fiscal 2016, ATMA said, citing government data. Over three years, the imports jumped sevenfold to 4.2 lakh units in Q1. The pace has slowed from 80% in the same period of 2015-16 and 115% in the year before that.

But the association is still worried as the growth is on a higher base then last year, which means the volume increase is still high. "There is no letup in imports and dumping of radial tyres, especially truck & bus radials, from China. Such indiscriminate increase in imports has put the domestic operations in TBR in serious disarray," said KM Mammen, chairman of tyre market leader MRF and head of ATMA.

Imports are increasing at a time when fresh domestic capacity, set up with an investment of Rs 25,000 crore in the past three to four years, is getting commissioned. According to ATMA, capacity utilisation has now come down to 60-65% from 80-85% in 2014-15. Currently 40% of the replacement demand in TBRs is being met by imports while domestic capacities are faced with the prospects of ever declining utilisation, ATMA stated in a letter to the Ministry of Commerce & Industry.

China dominated as the source country for imports of TBRs, with a share of 96% in the first quarter of 2016-17. China's share in total TBR imports was 40% in 2013-14, 70% in 2014-15 and 90% in 2015-16. According to ATMA, China's export price of TBRs is significantly lower than the price of such products in the Chinese domestic market. The per unit import price from China is even less than the cost of raw materials that go into the making of tyres, it alleged. It also raised the issue of inverted duty structure — the import duty on tyres from China is just 7%, while that on natural rubber, the key raw material for the industry, is 25%.

"Dumping of TBR tyres at such a large scale is also adversely affecting the interests of rubber growers in India as domestic natural rubber offtake is foregone to the extent of natural rubber used in manufacture of TBR tyres as raw-material," said Rajiv Buddhiraja, director-general at ATMA.

Tyre dealers gave a contrary view, and said the imported products were as good as the local ones, but with lower prices. Also, despite the increasing import, local tyre makers have reported strong profit margins in the last few quarters because of falling raw material price, they claimed.

"The indiscriminately high tyre prices (by local manufactures) have been established by the latest CCI (Competition Commission of India) investigation and a Tariff Commission study (2016)," said SP Sing, convenor of All India Tyre Dealers' Federation (AITDF) Truck Tyres.

Source : economictimes.indiatimes.com

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