Import restrictions will boost domestic tyre production, exports: ATMA

Much-needed restrictions on import of automobile tyres will pave the way for increased domestic production and export besides unlocking job creation potential, said the tyre industry captains in an interaction with Commerce Minister Piyush Goyal.

Indiscriminate import has been the bane of the tyre industry. Quoting data from DGCI&S, the industry pointed out that tyres worth $429 million were imported in FY19. Even in the first 11 months of FY20, a year that witnessed economic slowdown in India and reduced demand, tyres worth $385 million landed, Automotive Tyre Manufacturers Association (ATMA) said.

Most of the tyre imports are from China. Both in case of truck & bus radial (TBR) tyres and passenger car radial (PCR) tyres, China accounts for over 40 per cent of overall import. In case of tractor tyres, Chinese import is three-fourths of total import.

“Domestic manufacturing capacity is ahead of the demand curve and India is self-sufficient in manufacturing practically all kinds of tyres, including tyres for critical applications like fighter jets. Most of the imports are unwarranted and have been hurting capacity utilisation in domestic manufacturing,” KM Mammen, Chairman ATMA, said.

“The move has come as a sentiment booster for the industry that has been bearing the brunt of slowdown in the auto sector and disruption caused by the pandemic. Emboldened by the development, the tyre industry in India is looking at better-than-expected domestic production and increased exports, added Mammen.

Thanking the Rubber Board for aligning with the industry in seeking import restrictions on tyres, Mammen said, it goes without saying that import restrictions will benefit the entire value chain. The demand for domestic natural rubber will go up as the domestic tyre production will get a fillip.

According to ATMA, indirect import of NR through tyre imports has been hurting the interests of rubber growers. For instance, import of each unit of truck and bus tyres represents 25 kg of indirect import of rubber in the country.

Total tyre production in India declined by 8 per cent to 177 million in FY2019-20 in view of reduced demand in both replacement and OEM segments. Slowdown in the economy impacted the economic and consumer sentiment which resulted in vehicle sales plunging to multi-year low.

Truck and bus tyre segment, which is bread and butter of tyre industry, accounting for over 50 per cent of industry’s revenue witnessed the sharpest drop in production of 14 per cent.

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