India's tyre manufacturers want the government to impose an antidumping duty on truck and bus radial tyres coming from China, claiming that the cheap imports were hurting their business and forcing them to idle plants.
Imports of truck and bus radials (TBRs) have increased 64% from a year earlier in the fiscal year ended on March 31, according to the Automotive Tyre Manufacturers Association (ATMA). Average imports in the past year were well over one lakh units a month, compared with a little over 65,000 in fiscal 2015 and about 41,000 the year before, the association said.
China accounted for more than 90% of the imports last fiscal year from just 40% in 2013-14, with the government in February 2015 lifting anti-dumping duty imposed on it. TBR export prices from China are significantly lower than the prices of such tyres in the Chinese domestic market and compared with prices of other exporters such as Thailand and South Korea, ATMA claimed.
"Government needs to take urgent measures to halt such sharp surge in imports and dumping of tyres," said KM Mammen, the ATMA chairman who also heads India's top tyre maker, MRF. "Tyre manufacturers in India have made major investments towards greenfield and brownfield projects for manufacturing of state-of-the-art radial tyres. But indiscriminate import and dumping of cheap tyres from China are queering the pitch for domestic manufacturing," he said.
In the first nine months (April-December) of 2015-16, for which numbers are available with ATMA, the average per month domestic TBR tyre production was over five lakh units. Capacity utilisation levels of the industry in case of TBR manufacturing fell to 70% in 2015-16 from 80-85% the previous fiscal year.
According to local tyre makers, the cost of importing tyres works out less than the cost of raw materials in India. Because of the price advantage, Chinese TBRs now account for 30-40% of the replacement demand in India, they said. Dumping is also hurting the truck-bus bias tyre segment, they claimed. While India lifted anti-dumping duties in February 2015 on Chinese tyres, numerous other countries imposed that on Chinese imports, said Gaurav Kumar, chief financial officer at Apollo TyresBSE 0.68 %. "India has opened its market for low cost tyre imports from China, thereby putting at risk the government of India's clarion call on Make in India".
According to ATMA, tyre makers invested about Rs 35,000 crore on setting up capacity for TBR Tyres as it is the fastest-growing segment. Industry estimates show the TBR segment is expected to be 65% of the total truck & bus tyre market in India in the next four to five years from about 35% now. Currently, bias tyres account for 65% of the total bus and truck tyres.
India's truck and bus tyre exports fell 14% in April-November 2015-16 from a year earlier to over 1.24 million units.
"Indian tyre companies have sought intervention by the authorities," said Vivek Kamra, president of India operations at JK Tyre & Industries. "Most developed economies that have tyre manufacturing capacities have taken action against Chinese imports either through restrictions or through duties. We are sure that similar actions will be taken very soon in India."
