Industry fears tyre dumping

NEW DELHI, June 12: The domestic tyre industry is fearing dumping of tyres in India by mid-sized foreign tyre companies following the gover...

NEW DELHI, June 12: The domestic tyre industry is fearing dumping of tyres in India by mid-sized foreign tyre companies following the government8217;s decision to allow tyre imports.

The industry is more worried about import of used and second-hand tyres into the country than the new tyres. The second-hand tyres could be offered to Indian customers at throw-away prices since disposing of used tyres is a major problem in developed countries.

The Federation of Indian Chambers of Commerce and Industry FICCI has also joined the issue. FICCI president A S Kasliwal on Thursday urged the government to take immediate remedial measures to redress serious problem which the domestic tyre industry faces due to prospect of cheap imports.

FICCI8217;s statement comes close on the heels of a representation made by the Automotive Tyre Manufacturers Association ATMA to the government against free import of tyres.

Tyre industry sources say that there are hundreds of private brands in the international market owned by large trading companies. These companies could dump tyres in the Indian market since the international tyre market is also going through a lean phase.

Says V C Viswanathan, advisor, marketing, J K Tyre: 8220;Some imports have already begun and this will only increase in the future.8221;

Automative Tyre Manufacturers Association has pointed out that discarded tyres in developed countries are sold dirt cheap due to high cost of disposing such tyres which are an environmental problem. The US alone generated 250 million scrap tyres every year. Such tyres could easily find their way into the Indian market.

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According to ATMA, allowing tyre imports was the second blow to the industry, the first being the Union Budget. Though the government reduced the import duty on most of inputs for tyre manufacture to 32 , major inputs such as nylon tyre cord and synthetic rubber continue to remain at 42 . At the same time, the import duty on tyres has also been fixed at 42 .

In addition, most of the goods can be imported at new rates of import duty but natural rubber continues to remain on the restricted list. In contrast, car tyres have been shifted from restricted to free list.

The industry is also fearing large scale imports from Korea, Sri Lanka and Bangladesh since imports from these countries attract a 10 lower Customs duty as compared to other countries.