India has imposed anti-dumping duty on the import of a certain type of radial tyres used in trucks and buses in a bid to protect domestic tyre manufacturers from below-cost shipments from China for five years.
The anti-dumping duty has been imposed in the range of US$ 245.35-452.33 per tonne, said a notification issued by the Central Board Excise and Customs (CBEC). The duty has been slapped on ‘new/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having nominal rim dia code above 16 (inch)’ used in buses and lorries/trucks.
The levy follows a recommendation for the same by the Directorate General of Anti-dumping and Allied Duties (DGAD). Earlier, the Automotive Tyre Manufacturers' Association (ATMA) had filed an application on behalf of domestic tyre producers. It is understood that Apollo Tyres, J K Tyre Industries and Ceat had approached DGAD for investigations regarding dumping of tyres in India, as per a PTI report.
In its recommendation, the DGAD had said the domestic industry has suffered material injury on account of the imports from China. It found that the tyres have been exported to India from China ‘below normal value’.
Certain factors, including slow demand, low prices and abundant availability of raw material in China led to dumping of these products in markets like India. Currently, almost 80 percent of the imports are at concessional duties, which is threatening large investments made by domestic tyre manufacturers, causing material injury to the domestic industry.
The new anti-dumping bridges a huge gap by placing a balanced check mechanism on low-quality and cheaper tyre imports, which was a serious issue that was challenging the long-term interests of the Indian tyre industry.
Boost for India tyre makers
The anti-dumping duty will come as a shot in the arm for domestic tyre manufacturers who have been under pressure from sales of lower-priced Chinese-made TBRs.
Last month, Onkar S Kanwar, chairman, Apollo Tyres, had said: "The recommendation by the Directorate General of Anti Dumping (DGAD) in India to impose anti-dumping duty on truck-bus radials from China has vindicated our stand on the same, and which, once implemented, would be a boost for us in India."
JK Tyre has lauded the government’s decision to impose anti-dumping duty for five years, on truck and bus radial tyres from China, a move that is expected ease the burden on the domestic market by creating a level-playing field.
JK Tyre has been an advocate for the need of a strict anti-dumping duty on low-grade Chinese truck and bus radial tyres that have distorted the market by impacting the sales of domestic industry. For years, domestic tyre companies have faced unfair competition from Chinese manufacturers, which price their tyres up to 25 percent lower.
Vikram Malhotra, marketing director, JK Tyre & Industries, said, “The anti-dumping duty will address concerns related to unabated dumping of cheap low-grade Chinese tyres in the Indian market and will boost the industry. Our chairman Dr. Raghupati Singhania has been leading the charge for an anti-dumping duty for years now, as it gives a much-needed impetus for the Indian tyre industry. A check on the import of cheap Chinese pneumatic truck/bus radial tyres will guard domestic players by creating an enabling market that will motivate Indian tyre manufacturers to deliver to their customers quality tyres in and outside India.”
“Besides creating the right conditions for the market, the move to introduce an anti-dumping duty will in the long run benefit the consumer, as safety comes with a high premium on quality. Ensuring fair competition will pave the way for tyre companies to produce quality tyres that make allowances for continuous improvement,” Malhotra added.
Countries impose anti-dumping duties to guard domestic industry from surge in below-cost imports. India has also imposed similar duties on import of several other products including steel, fabrics and chemicals from different countries including China. Anti-dumping measures are essentially taken to ensure fair trade and provide a level-playing field to the domestic industry and are not a means to restrict import or cause an unjustified increase in cost of products.