Devalued Rupee Leads to Opposing Opinions on Tyre Dumping Duty

Depreciation of India’s Rupee against the US dollar is leading to stronger voices being raised for and against the country’s dumping duty on imported tyres. At present the duty is applied to bias tyres, and the All India tyre Dealers’ Federation (AITDF) is calling for its abolition in face of prices that effectively have increased 10 per cent in the last two to three months.

“Over the last eight to ten weeks, the rupee has depreciated by 10 per cent vis-à-vis dollar,” commented AITDF head SP Singh. “This has resulted in an increase of Rs 2,100 in the prices of a pair of radial truck and bus tyres. Moreover, the existing anti-dumping duty on bias tyres has already hit imports. So, we want the import duty to be abolished to compensate for the impact of rupee depreciation on the import of latest technology radial tyres.”

However the Automotive Tyre Manufacturers’ Association (ATMA) has approached the country’s commerce ministry with the proposal that anti-dumping duties be extended to radial tyres. “There has been a substantial increase in [the] import of radial tyres, which are dumped at the point of entry and are largely sold on [a] cash basis without any tax imposed at the retail end,” said Rajv Budharke, ATMA director general. “As such, margin of dealers are four-to-five times higher as compared to margins over imported tyres that are sold via proper trade channels.”

According to industry estimates, tyre imports have increased from 85,000 a year five years ago to around 100,000 a month today. More than 60 to 70 per cent of these imports are radials, tyres not covered by the anti-dumping duty. “Considering that around 85,000 tyres are dumped into the country from China and at least 70-75 per cent of these are sold via improper channels, it is estimated that it costs the state exchequer Rs 60-80 crore (RS 600 to 800 million) per month. Hence, there is an urgent need to restrict the import of tyres into the country,” Budhraje added.