Policy

Carbon black shortage: tyre industry wants govt to facilitate easy imports, waive duty

Our Bureau Kochi | Updated on February 19, 2018 Published on February 19, 2018

ATMA says demand-supply mismatch forcing factories to shutdown

The tyre industry has asked the Centre to facilitate easy import of carbon black, an essential raw material for tyre production, given its shortage in the domestic market.

The Automotive Tyre Manufacturers Association, in a representation to the Commerce Ministry, said several domestic tyre companies have been forced to take unplanned shutdowns for want of the raw material. The association has requested for its imports to ride out of the difficult phase.

The industry body cited a mismatch in capacity addition by domestic carbon black industry vis-a-vis the growing demand from the domestic tyre industry and increased exports by domestic carbon black manufacturers as reason for the shortage. The domestic demand-supply gap in carbon black which was 14 per cent in FY17 increased to 20 per cent in FY18, it said.

“ The domestic tyre industry is already facing shortfall in availability of natural rubber on a regular basis. Carbon black shortage has only added to the woes of the industry,” said Mohan Kurian, Convener, ATMA Supply Chain & Resources (SCR) Group.

Notwithstanding the domestic crunch, steep anti-dumping duty has been imposed on carbon black imports from China, the single largest producer of the raw material in the world accounting for about 40 per cent of global production. The tyre industry is left with no other choice but to import carbon black to meet domestic deficit, he said. ATMA has, therefore, asked the Government to allow tyre companies to import carbon black on a duty free basis to the extent of the existing gap between demand and supply to enable the domestic tyre industry continue with its planned production. Anti-dumping duty applicable on carbon black imports from China needs to be waived till such time the domestic availability improves. At the same time, export of carbon black from India needs to be regulated by way of fixing a minimum (higher) export price and / or quantitative restriction.

Published on February 19, 2018
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