[avishar]

Dear channel partner
we share and understand your concerns on the new government notification and are working with the govt and other agencies to obtain clarity and impact on Michelin tyres. In the next 2 or 3 days we will share further information once the situation becomes more clear. You can be rest assured that we will do our best to ensure continuous supplies of our tyres.

This is the biggest problem with whatever policy that this government has released. Everyone one of them seems to have been made without consultations with experts and without taking into all the parties in confidence. All ad-hoc stuff and which creates a lot of confusion, require clarifications, re-wordings and later rollbacks. And finally a new policy to replace the older one creating no policy consistency.

The govt is actually as anti-business as it can be.

[CrAzY dRiVeR]

Originally Posted by Nikhilb2008

I guess the people worst hit will be people with high-end performance cars.

And premium motorcycles.

Tyres above the 110 front and 150 rear section limits are not easily available - and so most owners of bikes above the 300cc segment will have concerns now.

But - as you said, need to wait for further details.

[dhanushs]

Offroading tyre’s were already scarce. With no company in India making proper competition tyres.

Now with this move things will go from bad to worse. Not only Offroading, Motorsports and special purpose tyres will dry up. Sad thing to happen for a budding industry.

[Turbanator]

Originally Posted by dhanushs

Offroading tyre’s were already scarce. With no company in India making proper competition tyres.

Not only Offroading, Motorsports and special purpose tyres will dry up

Don’t worry yet, HSN for those and ones used by heavy duty commercial vehicles are different and won’t be in this restriction.

Going forward, they will have to allow HSN of tyres beyond a particular size like 19 inches and beyond which are not manufactured in India. Idea seems to stop imports of smaller sizes that comes in bulk.

[Reesnat]

The issue with blanket rules like this are that it affects all parts of the industry when the intention is to protect and support the mainstream. Unfortunately the enthusiasts and the niche segments are the ones caught in the crossfire.

The ideal scenario would be to categorize based on different market segments and this needs to be done by industry professionals and not beurocrats. Our challenge with policy making has always been that we are driven by politics and power and not by a thorough understanding of the sector and market dynamics.

The intention here isn’t wrong, the shoddy implementation is. Just like the damn lockdown.

[BashfulKlutz]

Thank goodness I'm not the only one suspicious and cynical about this move. It seems strongly similar to the pre-1990s "socialism" era. It is not that we don't want to buy locally manufactured materials, but many of them simply haven't reached global quality levels yet. This import restriction will further disincentivise local manufacturers from improving their products, and it is not that they had poor sales either; many motorcycles and scooters below the 150 cc segment are usually shod with Indian tyres, such as our Activa having TVS tyres, and others being equipped with Ceat tyres etc.

[anjan_c2007]

Originally Posted by Turbanator

What about the sizes that no Indian manufacturers make? I don’t think anyone produces size 19 and above in India for cars.

They could have added higher duties on imports rather than a blanket ban or restricted common sizes which are manufactured in India.

It has put all categories of tyres that were hitherto imported freely into the country, in the "Restricted" list vide the DGFT notification dated 12.06.2020. The coding is based on the Indian Trade Commission's (ITC), Harmonised Code (HC) as mentioned in the notification. In the Harmonised Code each item listed is allocated an eight digit code number. The code # 4011 is assigned for new pneumatic tyres of rubber, while the last four digits indicate it's use in the respective category of motor vehicles.

Upon perusing the notification an inference could be drawn that the imports have not been banned, but have been restricted for all the notified categories. The licensed tyre importers who can justify that tyres of particular sizes are not manufactured in India may have to apply to the Directorate General of Foreign Trade (DGFT) to secure permission for such imports.

Hopefully, a way needs to be found out to overcome the hurdles. Maybe, they will amend the notification to include tyres of the respective sizes that are not manufactured in India.

The original Central Goods and Services Tax Act of 2017 had to subsequently come out with a few hundred amendments during the past three years and hence we can always expect changes to this notification at later dates.

http://www.eximguru.com/hs-codes/401...of-rubber.aspx

[Tucker48]

Give incentives to Indian companies like China does but by enforcing high import duty shows how incompetent Indian industry is.

The govt is promoting incompetence and had been doing that since independence.
I can understand a safeguard duty for some years to help mature the industry but this is completely wrong.

Despite having cheaper labour than China, we still can't compete with them, is a shame for Indian industry and for the govt in particular.
Kudos to Bajaj and then hero as they took on Chinese competition and won.

[SCORPION]

I have a strong feeling that Reliance Industries could be entering the automotive tyre business. Clearing the ground first.There is something all too familiar about this. Adanis are into infrastructure, else I would have suspected them too.

[NiInJa]

Going against the tide here, India is one of the top producer of natural rubber which is used for manufacturing tyres. Of-late imported Chinese tyres have started affecting local manufacturers, and we are not talking about premium brands or high performance tyres. Most cabs, autos, truckers and two wheelers will buy a cheaper tire if there is one as long as it works just fine. When I went to replace my scooter's tire 1.5 years ago, the shop offered me some Chinese brand for 750 while the usual MRF was around 950 Rupees, that was before I started haggling. So I were to buy 4 tyres, I was going to save about 800 Rupees already.

Given the current Covid crisis and people losing jobs, how do we ensure that Chinese imports don't destroy Indian tyre manufacturing industry ? I don't know how we ensure a level playing field here, perhaps experts can elaborate. Chinese labour is cheaper than India's and there is no way we can change it, can we ?

[mxx]

The only reason we started seeing good competent products from indian manufacturers is because of the competition from global manufacturers(which were not very expensive). With protection from imports, there are no incentives to improve their products. They can just rely on low price or limited availability of imported products.

[avira_tk]

Originally Posted by NiInJa

Going against the tide here, India is one of the top producer of natural rubber which is used for manufacturing tyres. Of-late imported Chinese tyres have started affecting local manufacturers, and we are not talking about premium brands or high performance tyres. Most cabs, autos, truckers and two wheelers will buy a cheaper tire if there is one as long as it works just fine. When I went to replace my scooter's tire 1.5 years ago, the shop offered me some Chinese brand for 750 while the usual MRF was around 950 Rupees, that was before I started haggling. So I were to buy 4 tyres, I was going to save about 800 Rupees already.

Given the current Covid crisis and people losing jobs, how do we ensure that Chinese imports don't destroy Indian tyre manufacturing industry ? I don't know how we ensure a level playing field here, perhaps experts can elaborate. Chinese labour is cheaper than India's and there is no way we can change it, can we ?

You're not going against the grain you're with the establishment, there are a handful of tyre manufacturers in India versus around 5 lakh small farmers who are struggling. The manufacturer is in a good place cost of inputs is at an all time low, they import their raw materials (natural rubber) and they want their substandard finished product to be protected from competition. They are ardent free market cheerleaders otherwise, except when it's their business that's on the line. It's not just the cab drivers and such "unenlightened" folks who buy Chinese tyres, people like you and I do it too. I personally won't buy an Indian brand tyre, made in India is good enough for me, unless I get a premium vehicle and then it's nothing Indian for me, seen Indian tyre company employees with Michelin tyres on their rides, tells you everything about the product you're getting.

What's the big deal about any Indian brand? they are popular with cost conscious users and Chinese are cheaper. Chinese products are just as good, anyway, every Indian brands' USP is "not good, but works and is cheap", nothing to differentiate from cheaper alternatives. Labour is not the reason why the Chinese products are cheaper, the entire country is geared towards large scale manufacturing, while we are busy levying higher taxes on parotta (really).

P.S. The reason why the farmers stick to rubber is that there is land use legislation, you can't shift to any other crop, in Kerala at least and we are the biggest for now. Rubber trees yield after 7 years, so we are invested in it for the long term.

[Sree]

What will happen to the tyres used by high end cars. Are all these run flat and all available among Indian manufacturers.

My Tiguan has something called self sealing tyres. Will these be available freely.

[NiInJa]

Originally Posted by avira_tk

What's the big deal about any Indian brand? they are popular with cost conscious users and Chinese are cheaper. Chinese products are just as good, anyway, every Indian brands' USP is "not good, but works and is cheap", nothing to differentiate from cheaper alternatives. Labour is not the reason why the Chinese products are cheaper, the entire country is geared towards large scale manufacturing, while we are busy levying higher taxes on parotta (really).

That is a good point. I think then, since Chinese imports cater to every kind of tyre needs for India: Cheap, economical, premium, small, big, run-flats etc. there is no good reason why Indian tyre companies should continue to exist, as they cannot compete anyway if they are not able to match up with the Chinese, ideally, we can just import them and the consumer wins, no ?

On a side note: The high quality tyres come with premium price irrespective of the country of origin. I can't really say Indian tyre manufacturers are as sub-standard as they are made to be, the Yamaha R15 v1 had MRFs and they could compete with any foreign brand as far as quality was concerned (If I remember correctly, they were costly too). Not sure why they could not manufacture them later. The point is, Indian companies have the potential but appear to be conservative in their approach.

[quickdraw]

Coincidence? Don't think so.