Cheap Chinese tyres may flood Indian markets.

Like most electronic appliances, China made tyres too, could soon be available in the domestic market.

In an unprecedented move the commerce ministry has accepted to review an export application from a Chinese radial bus and truck tyre exporter from China, thus, giving hope to over 300 Chinese tyre companies waiting to tap the Indian market.

NDTV has learnt from sources that Wei Fang Huadong Rubber Co Ltd had filed an application to export radial tyres to India. They have the capacity to export 10,000 tyres every month, much more than the average 2500 tyres capacity in the domestic market.

Wei Fang Huadong Rubber Co also plans to sell it in the Indian market for at least $49 cheaper than the domestic manufacturers.

The Chinese company's lawyer refused to comment saying: “Due to attorney-client confidentiality, we cannot respond to your queries. Also, we will not respond to market speculation."

It is the domestic industry that will be the worst impacted with rubber prices expected to go up and their repeated requests to the government to allow zero duty imports to access cheap Chinese tyres being shot down by the ministry.

“It will be damning for the industry and will have long standing repercussions for the industry," Ravi Budhhiraja of Tyres Manufacturers Association said.

The radial bus and truck industry in India has investments worth Rs. 12,000 crore in the pipeline and all are geared at ramping up production in the bus and truck segment. The segment may take a direct hit if the government allows Chinese exports without allowing the domestic industry to outsource from China.

Source : profit.ndtv.com