Select Page

Anti-dumping duty a must: ATMA

Anti-dumping duty a must: ATMA

By Sharad Matade:

Domestic tyre production in India is falling not because there is any laxity in demand, but because the growing demand in the replacement market is being met by dumped TBRs, observes Satish Sharma of Apollo Tyres, the newly elected Chairman of Automotive Tyre Manufacturers Association (ATMA)

What are your immediate priorities after being elected as the Chairman of ATMA?

Tyre industry is uniquely placed in the automotive spectrum of India. The industry espoused the ethos of Make in India much before the term was made popular by the Prime Minister Narendra Modi. India is one of the few countries in the world which has had self sufficiency in manufacturing of entire range of tyres needed (barring some specialty applications). The R&D activity in Indian tyre industry is one of the robust amongst the entire manufacturing landscape. Not only that, tyre industry has one of the richest value chains from one million rubber growers to another million working in tyre and rubber industries in one of the most workforce intensive sectors. Perhaps no other segment of Indian industry of this size touches the lives of so many people. Quality of Indian manufactured tyres is well recognised. Most of the international vehicles including the marquee brands are being rolled out on Indian manufactured tyres. At least four Indian tyre companies find a pride of place amongst the top 30 in the world.

Notwithstanding these sterling achievements, the perception of the industry is undermined by a few factors, real and sentimental. As Chairman of ATMA, my top priority will be to identify these factors and try to work around them so that the industry gets much deserved recognition.

Besides excellence in manufacturing which is industry’s primary role, tyre industry is also conscious of its social responsibility of contributing to overall road safety. During the current financial year, ATMA has taken ambitious steps through a series of safety drives in association with corporates such as Infosys and Honda Cars. We plan to underline the social responsibility stance of tyre industry with more such activities.

Capacity is being added by tyre companies in India and on other hand, production of TBR is falling. Do you see this challenge and what will be your steps to take this issue to concerned authorities?

Truck & Bus Radials (TBR) has been the fastest growing segment for tyre industry in India. Radialisation in heavy commercial vehicles in India started late but soon it gained momentum. As a responsible domestic segment, tyre industry put in capacities, both greenfield and brownfield, to be ahead of the demand curve for TBR entailing huge investments. As the capacities reached fruition, Chinese TBRs started landing in India in hordes. From 40,000 units per month three years ago, the imports reached approx. 1.5 lakh units per month. So domestic production is falling not because there is any laxity in demand but because the growing demand in the replacement market is being met by dumped TBRs. ATMA has already flagged this issue to the concerned authorities and our application for anti-dumping duties is under consideration of designated authorities.

The FY 16-17 is about to end. How has been the year and what’s your prediction for the next FY?

FY16-17, especially the first three quarters, have been a tough one for the industry. Topline has been under pressure for tyre companies across the board. Both production and exports in some of the key categories have contracted. Dumping of tyres from China and slowdown in domestic economic growth had its impact. While economy is back on track after demonetisation, Government’s commitment to move ahead with infrastructure growth bodes well for the tyre industry in the coming year. However Government needs to take measures to crack down on dumping of tyres in India.

NR production is expected to better this fiscal. Will ATMA continue to demand for zero import duty on NR?

NR production seems better in the current fiscal in view of the base effect as in the previous year the production hit a record low. In real terms, the NR production is still way behind its demand. Rubber Board itself has projected a deficit of 3.4 Lakh tonnes in the current financial year (FY17-18). Naturally, imports are the only way to bridge the domestic deficit in production. However with 25% duties (one of the highest in the world), the expensive imports lend a cost push to the manufacturing process. ATMA has therefore asked for duty waiver on NR import to the extent of domestic deficit which is a fair demand in the interest of giving a fillip to domestic manufacturing.

The US has withdrawn the anti-dumping duty on Chinese tyres. Do you think this will help to slowdown imports of tyres from China to India?

Yes, to some extent, it will divert the flows to US but with less than 10% import duty, India continues to be a very lucrative destination for import of Chinese tyres. Dumping of tyres will continue to take place as long as tyres are being sold at a cost which is lower than raw material cost accruing to the domestic industry.

We have seen consolidations in the Indian tyre industry in recent times. Are you expecting the same in upcoming periods?

Internationally tyre is a concentrated industry with top 5 players accounting for a significant share. A similar phenomenon exists in India too, but we have seen the entry of all the large international majors entering the country making Indian scenario very diversified. We have both domestic majors and international majors vying with each other for the growing Indian market. While this has led to increase in options for the consumer, it has also made the field very competitive. However we are unlikely to witness any serious consolidation effort in this direction in the near future.

About The Author

Leave a reply

Your email address will not be published. Required fields are marked *

Latest Issue

Newsletter Subscription

Recent Tweets

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

%d bloggers like this: