Govt slaps duties on new pneumatic radial tyres imported from China

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The government has imposed countervailing duty for five years on new pneumatic radial tyres, above 16 inches, which are imported from China. These tyres are normally used in buses and trucks.

After the notification, shares of JK Tyre, CEAT, MRF and Apollo Tyres went up between 3 per cent and 5 per cent.

The Centre listed nearly eight tariff items and the duty ranges from 9.12 per cent to 17.57 per cent.

The notification will give big relief to domestic companies that have invested heavily and get a large chunk of the business from this segment. 

For example, truck, bus radial (TBR) tyres contribute nearly 40 per cent to Apollo Tyres’ India revenue for original equipment and replacement market combined.

Apollo has the largest market share in the TBR segment in India, comprising 30 per cent.

Anti subsidy (CVD) duty has been imposed in addition to the anti-dumping duty on Chinese TBR imports to India on grounds that the Chinese government grossly subsidises its tyre exports. 

While this is indeed positive for the Indian tyre industry, the potential threat of Chinese companies using Thailand and Vietnam for stepped up exports to India continues unabated, said Rajiv Budhraja, director general, Automotive Tyre Manufacturers Association.

In 2017, the government imposed duty on TBR to the tune of around 12-18 per cent when the imports touched a peak of 150,000 units per month. The new duty will be addition to that. 

These two duties can be in the range of 18-22 per cent, though the injury margin established at the time anti-dumping duty was much higher (around 30 per cent). The current import is around 40,000-45,000 units per month.

China’s share in TBR imports was 92 per cent in 2016-17 and has gone down to 24 per cent in 2018-19. Thailand’s share has gone up from 2 per cent to 57 per cent in the same period.