The Hindu Business Line : Tyre cos cry foul over Chinese imports

THE domestic truck and bus tyre manufacturers are crying foul over what they consider to be a Chinese onslaught. They are undertaking a three-pronged approach to counter the offensive pricing on imported Chinese truck and bus tyres.

Feeling the heat, as a first step, domestic tyre makers have shot off a letter to the Department of Revenue Intelligence (DRI) requesting the latter to examine truck and bus tyre imports from China from the valuation angle.

"At current price of export from China, the tyre manufacturers in China would be making huge losses. This does not stand to reason. We apprehend there is substantial under-invoicing of Chinese truck and bus tyres," says the Automotive Tyre Manufacturers' Association (ATMA) letter.

The Association points out that the manufacturing process for tyres is the same world over and the raw material costs are also almost the same. Hence, the tyre makers are questioning the huge differential in prices between the Chinese and Indian truck tyre sold in domestic market.

The letter highlights that the import price of some of the Chinese truck and bus tyres range between $27 and $40 per unit. It points out that the free-on-board (FOB) price of similar tyres exported from India ranged between

$85 and $90, the latter being the prevailing average world prices for such tyres. As a second step, ATMA has decided to petition the anti-dumping directorate to initiate an anti-dumping probe on imports of Chinese truck and bus tyres into the country.

"We (ATMA) have decided to file a petition with the anti-dumping directorate. The import prices are hurting us. Some of the import prices of truck and bus tyres from China are even below our raw material cost. We are convinced that there is dumping," Mr D. Ravindran, Director-General of ATMA, told Business Line here.

A tyre industry insider said that market prices of Chinese tyres in the Delhi market (on a conservative basis) as a percentage of the Indian price stood at about 65 per cent.

"You may say that the imports from China are only a trickle. The flooding may not be too far away if one were to go by the recent trend of increased imports of truck and bus tyres," the tyre industry official said.

According to import statistics of the Directorate-General of Commercial Intelligence and Statistics (DGCIS), truck and bus tyre imports into India stood at about 52,000 units during April-September 2003. "In 2002-03, total official imports stood at about 80,000 units. Our assessment is that imports in the second half of the current fiscal alone would be 80,000 units. Add the first half of 50,000, the total imports of truck and bus tyres is expected to be about 1.3 lakh units," a senior tyre industry official explained. Truck and bus tyre imports during 2000-01 and 2001-02 stood at about 16,000 units.

ATMA's third initiative has been on the retreaded tyre front. ATMA has written to the Central Board of Excise and Customs (CBEC) stating that re-treaded tyres from China are not being imported in accordance with policy provisions of the Government.

The contention of ATMA is that the "floor price" provision (CIF $175 per tyre in the case of truck and bus tyres and CIF $25 per tyre for passenger car tyres) prescribed by the Government is not being adhered to in the case of imports of retreaded tyres from China.

About 52,060 retreaded passenger car tyres and 6,013 re-treaded truck and bus tyres have been imported from China during April-September 2003.