New Delhi: Bus and truck radial tyres manufacturers are together putting up Rs 2,000 crore investment next fiscal in expanding capacities. Companies such as Apollo Tyres, Birla Tyres, J K Tyre, Ceat and Bridgestone have together committed this investment in either setting up greenfield sites or adding new lines at existing plants.
This combined expansion should add about four lakh tyre sets per month to the existing domestic manufacturing capacity of 12 lakh sets per month.
One would have thought that this level of capacity expansion should take care of shortages which commercial vehicle makers may be facing right now and put a stop to uncompetitive imports from markets such as China and Thailand.
But that is not the case. A recent directive by the Centre, proposing imposition of a stiff anti-dumping duty on truck and bus radial tyre imports from China and Thailand appears to have opened a Pandora’s Box.
While the tyre manufacturers have welcomed the anti-dumping duty, the tyre dealers are opposing it.
The Automotive Tyre Manufacturers Association (ATMA) cited unfair trade practice by Chinese and Thai manufacturers, which are allegedly exporting tyre to India at prices even lower than those of some raw materials, while supporting duty on imports.
The Director General of ATMA, Rajiv Budhraja, told DNA, “In most cases, tyre imports are not happening because of any demand-supply gap. Imports are being done by small firms, at prices where the landed cost is much lower than domestic prices. We had requested for imposition of anti-dumping duty way back in 2007, and the government has only indicated now that it is planning to impose this levy. Any opposition to this duty is not right.”
Budhraja cited import figures to bolster his claim, 5 years ago, total radial tyre imports for trucks and buses stood at 80,000 units in a year. But this figure has reached 1.2 lakh units per month now. This, despite the government imposing a similar anti-dumping duty on ‘bias’ tyres some years back after similar instances of dumping by China and Thailand.
The All India Tyre Dealers’ Federation (AITDF) has written to the government opposing any new levy on tyre imports.
SP Singh, convenor, AITDF says that not only will the new levy make tyre imports dearer by Rs 3,000-4,000 per tyre, it will also result in shortage of tyre supply to vehicle makers.
“Last year, the government had imposed quantitative restrictions on import of truck/bus radials, which resulted in shortage of tyres in 2009, besides reducing radial imports to just 25,000-30,000 a month from earlier monthly average of 1.3 lakh. Also, domestic tyre makers raised prices and strangulated the after-market”.
So where does the truth lie? The new duty is yet to be imposed, but if it is levied, imports would become dearer by between $25 and $99 per tyre set. Budhraja denies any supply shortages, pointing out that imports are still allowed.
According to ATMA, a domestic radial tyre set (tyre, tube and flap) costs Rs 15,000-17,000 whereas Chinese tyre sets can be bought for Rs 12,000. So for a normal truck, for example, the differential could work out to be upwards of Rs 22,000.
Source : dnaindia.com