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| The Government of India on September 19, 2017 re-imposed Anti-dumping duty (ADD) on import of new Chinese Truck and Bus radial (TBR, including tubeless), for a period of five years effective from September 18, 2017. With this move, Chinese imports will become costlier thereby providing a level playing field for Indian T&B tyre manufacturers. ICRA expects this will lead to a strong demand pickup for large Indian truck tyre manufacturers. The ADD ranges between $245.35 and $452.33 per tonne, depending on the producer and exporter. Says Mr. Subrata Ray, Senior Group Vice President, ICRA, “With sizeable investments made in recent years towards creation of TBR capacities on the back of healthy long term domestic demand potential for radial tyres, rising imports had an adverse impact on industry capacity utilisation levels. With imported Chinese TBRs priced lower than domestic Truck and Bus bias (TBB) tyres, these imports made heavy inroads into the Indian T&B replacement market, eroding TBR volumes for Indian players. The aggressive pricing of Chinese TBR tyres limited the competitiveness of domestic players, compounding the problem of lower rubber (raw material) prices. With the re-imposition of ADD by India and the USA ruling out ADD on Chinese tyres in February 2017, Chinese imports will become costlier, levelling the playing field for Indian T&B tyre manufacturers. We expect this will positively benefit large Indian truck tyre manufacturers.” Tyre imports, which represent ~7% of the domestic tyre industry (in value terms), has witnessed a 10% growth in the last three years (CAGR ending FY2017) as against the industry’s revenue growth[1] of 2%. Specifically, influx of TBR tyres was high during this period, with TBRs accounting for 43% of total tyre imports (in values) in FY2017. TBR imports surged from Rs. 7.1 billion in FY2013 to Rs. 14.2 billion in FY2017 and accounts for a major share of TBR consumption in India. Country-wise, China cornered a lion share, with ~89% of TBR tyres originating from China in FY2017. Following the imposition of ADD on Chinese tyres by the USA in FY2015 and the removal of ADD on Chinese tyre imports to India in FY2015, Chinese TBR tyre imports to India had witnessed a sharp growth. |
| "Now you can say the Chinese imports have become less than half. During the demonetisation month (November 2016), it dropped by 20 per cent. GST coupled with anti-dumping duty, it has started to sink further," ATMA chairman Satish Sharma told reporters here today. Noting that import of Chinese tyres has started to 'decline', he said, "the imports of Chinese tyres stood at 1,50,000 units in May 2016. Today it is 50,000 units and still going down." Tyre dealers have become "confident" of not purchasing Chinese tyres as their "profitability" has also crashed, he said. |
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Originally Posted by smartcat
(Post 4311653)
What could be the link between demonetization and Chinese tyre imports? |
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