Higher Import Duty on radial car tyres won’t have major impact on domestic industry: ICRA

Source: The Hitavada      Date: 02 Oct 2018 10:16:42


 

Business Bureau,

THE higher Customs Duty imposed on passenger car radial tyres is unlikely to have a major impact on the Indian tyre industry, according to credit ratings agency ICRA.
The Government had increased basic customs duty on import of passenger car radial (PCR) tyres, from 10 per cent to 15 per cent effective from September 27, 2018. “ICRA expects the duty hike to have no major impact on the Indian tyre industry,” the credit ratings agency said in a statement. Explaining the reasons, ICRA Vice-President Srikumar K said, “The 500 bps rise in customs duty on PCR tyre imports is unlikely to have a major impact on the Indian tyre industry as PCR tyres imports account for less than three per cent of overall tyre industry (in value) and meet only (around) 13 per cent of domestic PCR demand.”

He further said the presence of free trade agreements with major countries like China and Thailand resulted in import of tyres at concessional rates. “China and Thailand accounted for around 60 per cent of the total PCR tyre imports in FY2018 followed by Indonesia, United Kingdom and Germany,” he said.


ICRA said, PCR tyres accounted for 42 per cent of total tyre imports in FY2018, the share rising sharply in the last one year as the imposition of Anti-dumping-duty considerably brought down TBR tyre imports. Also, against a 6.1 per cent growth (CAGR) in total tyre imports during FY2015-18, PCR tyre imports grew at a higher rate of 12.7 per cent because of aggressive pricing in the replacement segment, it added.