The Hindu Business Line : Tyre imports from China to enjoy duty sops

The Finance Ministry has formally included China in the list of countries (Sri Lanka, Bangladesh and South Korea) that can avail themselves of preferential rates of Customs duty on certain specified products under the Bangkok Agreement.

The agreement, signed in 1975, refers to an initiative under the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) for trade expansion through exchange of tariff concessions among members.

China formally acceded to it in April 2000.

Mr D. Ravindran, Director-General of the Automotive Tyre Manufacturers' Association (ATMA), told Business Line that the five per cent concession in Customs duty would definitely result in more imports of truck and bus tyres into India from China.

"This would act as an impetus for more imports. The prices of Chinese truck tyres are at least 15-20 per cent lower at the marketplace. Even though there may be the issue of lower quality in Chinese tyres, this price level is something which we may not be able to match."

Currently, under the agreement, tyre and tube imports from South Korea, Bangladesh and Sri Lanka attract 20 per cent duty against the basic duty of 25 per cent applicable on tyre imports. Now, tyres and inner tubes can be imported from China at 20 per cent duty.

In June last year, the Cabinet had endorsed the move by India and China to offer tariff concessions to each other under the agreement.

The Government has been maintaining that China's accession to the agreement would work to India's advantage.

China had offered tariff concessions to India on 182 items (corresponding to 217 tariff lines) as per the International Trade Classification Harmonised System nomenclature.

These include chemicals, leather and textile products and diamonds.

India has granted concessions on 106 items, corresponding to 188 tariff lines, to other member countries and China.

The items for which preferential duty has been specified for imports from Bangladesh, Sri Lanka and South Korea include ceramic tiles, cocoa beans, carded and combed wool, toys, paper and paper boards, natural rubber, molasses from sugar extract, pneumatic tyres, inner tubes, natural rubber and rubber mats.

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