Second-Hand Radial Tyres Import To Hit Rubber Growers

The governments decision to allow import of second-hand and radial tyres under the new exim policy might sound the death knell for rubber growers in the country as they would be directly affected in the event of a consequent fall in rubber consumption, sources said.

Substantial import of tyres into the country will definitely affect the local tyre market and within no time its repercussions may reach the natural rubber market also. Thus, it will affect the rubber growers, sources said.

The new exim policy allows import of tyres of passenger automobile vehicles, including two and three-wheelers and personal tyre of vehicles, besides permitting free import of used and retreaded tyres and tubes under open general licence (OGL).

 

The greatest danger over allowing import of used tyres is that it would pave way for smuggling in of new tyres in the garb of used tyres, they said. Such a thing took place four years back when bulk imports of tyres were permitted due to rubber shortage and new tyres found their way into Indian market, sources said.

But import of used tyre will affect the rubber growers in particular as the demand for new tyres will decrease drastically, they said. The prices of rubber were dormant and once used tyres start coming in, there would be further fall in the commoditys prices, sources said.

Sources said since there was a tendency in the country to use tyres till they were worn out, there could be no way through which a user could know the defect in used tyre that is being brought into the country.

The import of used tyres could lead to environment problems as they were inflammable. In the US, people had to pay about 50 cents to throw away

tyres, they would now be paid $1 dollar for the used tyres.

Import of the used tyres will also cause problems if we seek anti-dumping duty against them, sources said.

What domestic price can you fix for the used tyres? How can the cost calculation be done? sources said.

Even if anti-dumping duty were to be imposed, it would not make import of used tyres costly as the cost of nominal tyres in the exporting countries were nominal, they said. With a vast and growing market in India for vehicles, giant multi-national tyre majors would spare no efforts to export tyres to India and such shipments would be at a lower price than the market rates in the exporting countries, they said.

Sources said the government had allowed radial tyres import when Indian tyre companies had begun manufacturing radial tyres just two or three years back and allowing radials import before they could stabilise was a retrogade step.

Another surprising aspect of allowing tyres import under OGL was that it has so far been under negative list. From a negative list, it is usually brought to the restricted list and then to the special import licence (SIL) before being brought under OGL. But in this case, it has been straight away brought from the negative list to OGL, they said.