In an already tough market, where duties on import of raw materials are so

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high, there is a serious threat to the Indian tyre manufacturers for the domestic market in the coming years as more Chinese tyres are expected to make their way into India.

A senior official of the automotive tyre manufacturers’ association (ATMA) told Financial Chronicle that the US has imposed heavy duties on import of Chinese tyres, so many of them are likely to find their way to India, as the government has not imposed such stringent regulations till now.

“US has imposed a special tariff on import of Chinese tyres to 35 per cent in first year, 30 per cent in second year and 25 per cent in the third year. Therefore, it is likely that China would not export its tyres to the US and would concentrate on markets in countries like ours, where there are no such duties,” director general ATMA, Rajiv Budhraja told FC.

He said the US imposed this regulation on September 11, but in India no action has been taken so far, despite ATMA sending a similar application to directorate general of anti-dumping and allied duties (DGAD) under the ministry of commerce and Industry on June 2, 2008. An email query of the latest updates on this subject to DGAD by FC remained unanswered.

“If immediate concern is not shown by our government, then there is serious threat of such imports coming into India because Chinese could push tyres meant for the US into India. As a matter of concern, we need to work in tandem with the US and the case needs to be put on fast track,” he said.

With export of tyres being down by about 26 per cent in FY 2008-2009 due to the downturn, domestic market appears to be at risk, especially if Chinese exports find their way into India, he added.

“Exports have started picking up since July this year and from now on, it would continue to grow,” JK Tyre marketing director, A S Mehta, said.

He said that for problems related to import of truck and bus radial tyres, the government should introduce a licence scheme for importers and distributors with heavy charges, so that there were no unorganised imports through different routes. India’s tyre industry constitutes a size of around Rs. 25,000 crore per annum, which is directly affected by such imports.

Says convenor of all India tyre dealers federation (AITDF), SP Singh: “We do not see any harm in Chinese tyres coming into India, because Indian manufacturers are not producing such tyres. The government in its hearing last month have already given license to five Indian companies, including Tata Motors, Michelin and Bridgestone, to mport tyres from China.”