India’s rubber goods industry fears a surge in imports from China in the wake of breakdown of the latter’s trade talks with the United States.
Reports indicate that rubber goods are among the Chinese products on which the US is likely to impose higher tariff. “If China’s access to the US is blocked, then India with its large consumer market is next on its radar,’’ said Rajiv Budhraja, director general of the Automotive Tyre Manufacturers’ Association. India’s tyre sector, which accounts for the major chunk of rubber goods industry, is currently partially insulated from the Chinese threat through antidumping duty on truck and bus tyres. In addition, the government had raised import duty on radial car tyres from China to 15 per cent from 10 per cent. However, Budhraja said, “Tyres from China are reaching India through Thailand, where the former has manufacturing facilities. Tyre imports from Thailand to India have been on the rise.”
More than the tyre sector, however, it is the non-tyre sector that is feeling jittery over the failure of the US and China to reach an agreement. “Import of lower quality goods at cheaper prices from China has increased pressure on the local industry,’’ said Vikram Makkar, president of the All India Rubber Industries Association. Makkar said that unlike the tyre sector the non-tyre sector has been at a disadvantage owing to an inverted duty structure and no anti-dumping duty to provide relief. “Rubber products like belts, hoses and other components used in auto, infrastructure and white goods segments will be hit the hardest and the cascading effect will be felt on defence and railways too,’’ he said.
India’s organised rubber goods industry may get an opportunity to grab a larger share of the US market in the absence of China. “But that is only a small percentage. Majority of the industry will feel the negative effect of increased import from China,’’ said Makkar.
