A surge in the import of tyres, even as auto sector is coming out of a protracted slump, has put the domestic tyre industry in a tight spot, Automotive Tyre Manufacturers Association (ATMA) has said.
ATMA, in a communication to the Commerce Ministry, pointed out that there was a concerted move to dump radial tyres in India so as to blunt the country’s edge in technologically superior radial tyre manufacturing.
The tyre industry has put in investments to the tune of ₹20,000 crore for manufacturing state-of-the-art radial tyres in the last 3-4 years.
However, a significant capacity is lying unutilised since the demand is being met by imported radials, largely dumped from China, it said. The truck and bus radial tyres (TBR’s), which account for a significant part of new manufacturing capacities put in by tyre manufacturers, have seen a significant jump in imports. TBR imports are up by 60 per cent from around 4.9 lakh tyres in FY 2013-14 to 7.8 lakh tyres in FY 2014-15.
The tyre industry has been promoting the usage of radial tyres in commercial vehicles for fuel efficiency and safety, and has also invested heavily so as to be ahead of the demand curve. However import of tyres, particularly truck and bus radials, has been taking place indiscriminately and at low prices.
Some cases of Chinese imports are even below the cost of raw materials that go in the making of a truck and bus tyre. This is causing huge injury to the domestic tyre manufacturers, Raghupati Singhania, Chairman of ATMA said. Import of TBRs from China have gone up three times from 1.9 lakh tyres in 2013-14 to 5.5 lakh tyres in 2014-15.
The tyre industry being highly capital-intensive, the imports not only threaten to make new investments in capacities idle, but also threaten the loss of employment, the association said.
As against actual users, truck and bus tyres are largely being imported by small traders and importers who resort to various unfair trade practices such as under invoicing or wrong classification of product category which besides vitiating the market also leads to considerable loss of revenue to the government, ATMA alleged.
