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Truck, bus tyre import nearly doubles

Import in all categories of tyres has increased 20% annually for the April-August period

George Joseph  |  Mumbai 

Truck, bus tyre import nearly doubles

There has been a whopping 92% jump recorded in the import of Truck and Bus Radial [TBR] segment in April-August period of the current financial year. Import in all categories of tyres has increased 20% in the period, compared to the same period of last fiscal.

3.9 million units were brought into the country as against 3.2 million in the same period of 2014-15. Tyre import from China is costing 25% lower after recent devaluation of Yuan and this will result in much higher imports of tyre going ahead. .

Import edged up in all the months except in April, according to a data analysis of Automotive Tyre Manufacturers Association [ATMA].

Whereas as per the data of ATMA, export of tyre from India dropped 4% in April - May period [Latest data available]. Incidentally, the Indian tyre sector records a drop in exports after a gap of five years.

Except in April, wherein import had dropped 9%, in May 15% rise and a whopping 55% jump in June were recorded as per the data. The aggregate import for April - August period has swollen up 20%, compared to the same period of last FY.

According to ATMA, India's trade agreements facilitate large scale tyre import. Basic Customs duty on tyres is

10%, tyres can be imported under various Trade Agreements at much lesser rates of duty and in some cases even at 'nil'rates of duty. For Asia Pacific Trade Agreement the duty is 8.6% while for ASEAN countries and for India - Malaysia Trade Agreement it varies from 0-6% only. Rajiv Budhraja, Director General, ATMA said that the import of truck & bus radial tyres (TBR) went up 60% in FY 2014-15 from an average monthly import of 40883 units in FY14 to 65375 units. The TBR imports have shown no let up in intensity in the current financial year as well. In the first five months of current fiscal (April-August 2015), the imports have gone up a whopping 92% year-on-year. Average per month import of TBR in April- August has reached 108,560 units.

Indian tyre that has put in substantial investments to the tune of US$ 4 billion, especially in capacity expansion of TBR in recent years. Radialisation levels in Truck & Bus tyres are expected to go up fast in India. Unfortunately new capacities for manufacturing radial tyres put in by Indian tyre manufacturers are being underutilised in view of import of low cost Chinese TBR tyres, he added. China's share in TBR import which was 40% in 2013-14 went up to 70% in FY2014-15 and has further increased to 88% in the first five months of current fiscal (2015-16).

In the case of motor cycle tyres import increased 61%. Only the passenger car radial [PCR] segment recorded a marginal dip of 0.02% in April - August period. Again China was the largest source of import of PCR, accounting for 49% share.

Thailand is the other major country that accounted for almost a quarter of the passenger car import.

As such, Chinese tyres are priced at about 25% cheaper than Indian made tyres. The recent depreciation in Yuan will make Chinese tyres all the more lucrative and import is likely to go up further, he added. This definitely is a real threat to the Indian tyre makers in the light of the huge investments in capacity expansion.

Vietnam has taken substantial lead over China as the major source of motorcycle tyres imported in India. Vietnam accounted for about two-thirds of Motorcycle tyre imports with China accounting for one-third in the April-August period. In TBR segment Japan and Spain take second and third spots and in car tyres Thailand and Korea follows China.

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First Published: Tue, October 13 2015. 14:14 IST