Govt frees import of radial tyres .

The Government has freed the import of radial tyres in to the country by removing it from the restricted list.

The notification to this effect has been issued by the Directorate General of Foreign Trade, Ministry of Commerce, on Wednesday.

The move is expected to help both the automakers and tyre retailers, who had asked the Government to free tyre imports in view of rising domestic tyre prices.

Radial tyres were put on the ‘restricted list' of imports earlier in November 2008.

The exponential demand for tyres by the rapidly growing auto industry had put pressure on tyre manufacturers who had not been able to increase production capacities as fast. Faced with a supply shortage of radial tyres from domestic tyremakers, automakers, Ashok Leyland and Tata Motors, had reported a drop in commercial vehicle production.

Ashok Leyland had thus requested the Government for an import licence for radial tyres, which had been pending for a while.

Increasing demand by the auto industry and rising natural rubber and crude prices have led to an increase in domestic tyre prices in this year.

Since January, tyremakers have already increased prices 6-8 per cent, while both JK Tyre and Apollo have indicated a further 3.5 per cent hike in June.

Mr Rajiv Budhraja, Director-General, Automotive Tyre Manufacturers' Association, told Business Line, “We are concerned that there will be a spurt in import volumes for trade purposes in the aftermarket. We have nothing against licences being given to automakers.”

He added that if all duties and taxes are paid, imported tyres are cheaper by 10-15 per cent, but in cases where there is circumvention of duties, imports can be cheaper by 25 per cent. This, he said, can be very harmful for domestic industry.

“Although there is anti-dumping duty for Chinese and Thai imports, there have been reports of significant volumes coming from Spain and Malaysia,” he said.

Source : Business Line