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India slaps anti-dumping duty on Chinese tires

NEW DELHI – The Indian government re-imposed anti-dumping duty (ADD) on import of new Chinese truck and bus radial (TBR, including tubeless) tires, for a period of five years effective from September 18.

With this move Chinese imports will become costlier thereby providing a level playing field for Indian truck & bus tire producers. Investment Information and Credit Rating Agency of India Limited (ICRA) expects the move will lead to a strong demand pickup for large Indian truck tire manufacturers.

The ADD ranges between $245.35 and $452.33 per ton, depending on the producer and exporter.

“With sizeable investments made in recent years towards creation of TBR capacities on the back of healthy long-term domestic demand potential for radial tires, rising imports had an adverse impact on industry capacity utilization levels,” said Subrata Ray, senior group vice president, ICRA.

He further emphasized, “With imported Chinese TBRs priced lower than domestic truck and bus bias (TBB) tires, these imports made heavy inroads into the Indian T&B replacement market, eroding TBR volumes for Indian players. The aggressive pricing of Chinese TBR tires limited the competitiveness of domestic players, compounding the problem of lower rubber (raw material) prices.”

Ray believes that with the re-imposition of ADD by India and the U.S. ruling out ADD on Chinese tires in February 2017, Chinese imports will become costlier, extending level playing field for Indian T&B tire manufacturers. “We expect this will positively benefit large Indian truck tire manufacturers,” said Ray

Tire imports represent 7 percent of the domestic tire industry (in value terms) and have witnessed a 10 percent growth in the last three years (CAGR ending FY2017) as against the industry’s revenue growth of 2 percent.

Specifically, influx of TBR tires was high during this period, with TBRs accounting for 43 percent of total tire imports (in values) in FY2017. TBR imports surged from INR7.1 billion in FY2013 to INR14.2 billion in FY2017 and accounts for a major share of TBR consumption in India.

Country-wise, China cornered a lion share, with 89 percent of the imported TBR tires volume in FY2017. Following the imposition of ADD on Chinese tires by the U.S. in FY2015 and the removal of ADD on Chinese tire imports to India in FY2015, Chinese TBR tire imports to India had witnessed a sharp growth.

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