The Government has re-imposed anti-dumping duty (ADD) on import of new Chinese truck and bus radial (TBR, including tubeless), 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 T&B tyre manufacturers.
ICRA expects this will lead to a strong demand pick-up for large Indian truck tyre manufacturers. The duty ranges between $245.35 and $452.33 per tonne, depending on the producer and exporter.
Says Mr. Subrata Ray, Senior Group Vice President, ICRA: “With sizeable investments made in recent years towards creation of TBR capacities on the back of healthy long-term domestic demand potential for radial tyres, rising imports had an adverse impact on industry capacity utilisation levels. With imported Chinese TBRs priced lower than the domestic tyres, these imports made heavy inroads into the Indian T&B replacement market, eroding TBR volumes for Indian players. The aggressive pricing of Chinese TBR tyres limited the competitiveness of domestic players, compounding the problem of lower rubber (raw material) prices. With the re-imposition of ADD by India and the US ruling out ADD on Chinese tyres in February last, Chinese imports will become costlier, levelling the playing field for Indian T&B tyre manufacturers. We expect this will positively benefit large Indian truck tyre manufacturers.”
Tyre imports, which represent ~7% of the domestic tyre industry (in value terms), has witnessed a 10% growth in the last three years (CAGR ending FY2017) as against the industry’s revenue growth of 2%. Specifically, influx of TBR tyres was high during this period, with TBRs accounting for 43% of total tyre imports (in values) in FY2017.
TBR imports surged from Rs. 7.1 billion in FY2013 to Rs. 14.2 billion in FY2017 and accounted for a major share of TBR consumption in India. Country-wise, China cornered a lion’s share, with ~89% of TBR tyres originating from China in FY2017. Following the imposition of ADD on Chinese tyres by the US in FY2015 and the removal of ADD on Chinese tyre imports to India in FY2015, Chinese TBR tyre imports to India had witnessed a sharp growth.