Tyre companies urge govt to remove anti-dumping duties, curbs

The All India Tyres Federation sought removal of anti-dumping duty on tyres and urged the government to lift import restrictions imposed

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The All India Tyres Federation on Thursday sought removal of anti-dumping duty on tyres and urged the government to lift import restrictions imposed after the Competition Commission of India's (CCI) order on domestic tyre manufacturers for indulging in price rigging and cartelisation.

In August 2018, the CCI had imposed a total fine of more than Rs 1,788 crore on Apollo Tyres, MRF, CEAT, Birla Tyres, JK Tyre & Industries and the Automotive Tyre Manufacturers Association (ATMA). They were found to have violated Section 3 of the Competition Act during 2011-12. The Section prohibits anti-competitive agreements.

An appeal was filed against the CCI order before the Madras High Court and the same was dismissed on January 6, 2022.

In a letter to Finance Minister Nirmala Sitharaman and Commerce & Industry Minister Piyush Goyal, the Federation also sought an appointment to its delegation so that it explains the entire issue.

The CCI on Wednesday said the Supreme Court has dismissed a petition filed by tyre companies.

"On February 2, 2022, the CCI had passed a final order dated May 31, 2018, against five tyre companies...and their association, Automotive Tyre Manufacturers Association (ATMA), for indulging in cartelisation," All India Tyre Dealers Federation President S P Singh said in the letter.

The tyre makers acted "in concert to increase the prices of cross-ply/ bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the market, thereby contravening (certain) provisions of the Competition Act, 2002", he said in the letter.

The CCI's August 2018 order had unequivocally found these five tyre manufacturers indulging in price rigging and cartelisation leading to stifling and exploiting retail tyre trade and a huge mass of consumers for trucks/ buses, LCVs, passenger vehicles and two-wheelers in the domestic market, the Federation stated in the letter.

Therefore, it added, the manufacturers do not have any right to enjoy protection from the government by way of anti-dumping duty and restriction on import of various categories of tyres and tubes, which is prevailing now in the market.

The Federation also said domestic tyre makers as a cartel have been imposing for more than the last 10 years indiscriminate, arbitrary and unfair tyre prices on the hapless domestic mass of tyre buyers in India.

"The All India Tyre Dealers Federation (AITDF) urges that the government should with immediate effect act in the larger interest of road transport and tyre rade to remove restrictions on import of tyres imposed on in June 2020," it said.

The Federation said the government should also direct the anti-dumping authority and the finance ministry as well as the Ministry of Corporate Affairs to duly intervene to expedite the justice required, the Federation said.

The case was initiated on the basis of a reference received from the corporate affairs ministry and that the reference was based on a representation made by the All India Tyre Dealers Federation (AITDF) to the ministry.

The tyre manufacturers had exchanged price-sensitive data among them through the platform of ATMA, and had taken collective decisions on the prices of tyres, as per CCI.

The watchdog, citing its order, said in the release that sharing such sensitive information made coordination easier among the tyre manufacturers.

It also asked them to cease and desist from indulging in unfair business practices.