Indian Tyre Dealers Voice Opposition to Import Duty

Trouble is brewing between Indian tyre manufacturers and dealers. A duty on passenger car tyres imported from China is expected to be introduced by the end of June, and the two parties hold differing views on the matter.

“We have invited views from all concerned. We will look at all representations before taking a decision. However, on the face of it, there does seem to be a case for application of safeguard duties,” a government official told India’s Economic Times newspaper on condition of anonymity.

However, according to SP Singh from the All India Tyre Dealers’ Federation, domestic passenger car radials are greatly overpriced. He also noted that the value of domestically produced tyre sales between April and December 2008 was on average more than ten times that of imported tyres. “Import at reasonable and concessional fair prices is the need of the hour to protect the consumer against arbitrary pricing by the domestic industry,” Singh said.

Despite this, the World Trade Organisation has been informed of the Indian government’s intention to impose duties on imported Chinese passenger car tyres on the basis of an increase in Chinese imports since 2005-06, both in absolute numbers and relative to domestic sales. The share in total sales accounted for by imported tyres increased from 2.52 per cent in 2005-06 to 7.29 per cent in October-December 2008. The domestic industry’s monthly production and capacity utilisation also declined during October-December 2008, thereby hurting profitability, the Indian submission to the WTO stated.