Indian tyre makers’ association seeks duties review

The organisation representing India’s tyre makers has petitioned the country’s Finance Ministry to review its regional trade agreements and the duties charged under them. In a memorandum, the Automotive Tyre Manufacturers’ Association reiterated its long-standing claim that domestic manufacturers are being harmed by a double whammy of cheap, imported tyres and heavily-taxed raw material imports.

According to an article appearing in The Hindu Business Line on 3 July, ATMA vice-chairman Raghupati Singhania’s complaint to the ministry centres on the eligibility of finished tyres for duty concessions – while they attract a basic customs duty of ten per cent, under various trade agreements the tariff in practice can lie between zero and 8.6 per cent; tyres imported from Sri Lanka and Singapore are charged no duties, those imported under the ASEAN Free Trade Area agreement attract a six per cent duty and tyres imported under the Asia-Pacific Trade Agreement an 8.6 per cent duty. Raw materials required for tyre production, on the other hand, are ineligible for a reduction in duties. The import duty attached to natural rubber in India is currently 20 per cent.

In order to combat growing imports in a market that has more than enough domestic capacity to meet its tyre needs, Singhania has called on India’s government to increase customs duty for finished imported tyres to above ten per cent, a measure he says can be implemented without contravening World Trade Organization provisions as there is no bound rate on tyres. The ATMA has also asked for duties on raw materials to be reduced in cases where domestic supply is insufficient to meet demand and a complete waiver of duties on raw materials that are not produced in India at all.