India: Curbs on Chinese tyres lift spirits of rubber growers

KOCHI, AUGUST 24:

With the Centre imposing anti-dumping measures on Chinese tyres, natural rubber (NR) growers here are looking to scale up rubber production.

It is pointed out that the import of one lakh tyres is equivalent to the consumption of almost 3,000 tonnes of rubber in a month. If tyre companies turn to the domestic market to source rubber, this would benefit growers, thereby making production more remunerative, said George Valy, President of the Kottayam Rubber Dealers Association.

A subsidy scheme for NR production announced by the Kerala government, and the revival of the monsoon, would help production exceed the 60,000-tonne mark in August. Rubber Board data have also cited a 7.5 per cent rise in production till July.

Satish Sharma, Chairman, Automotive Tyre Manufacturers Association (ATMA) said any step to prevent dumping of tyres would help the entire value-chain of the sector, including a million-odd rubber growers. An indiscriminate surge in the import of Truck & Bus Radial (TBR) tyres from China has been a lose-lose proposition for the stakeholders both in rubber and tyre sector.

Indirect imports surge

Quoting a study, Sharma said the increase in import and dumping of TBR tyres had led to an indirect import of 46,219 tonnes of rubber in the FY17. In fact, such import of rubber through imported TBR has been on the rise in the last three years.

From 23,000 tonnes in FY15, the indirect import of rubber through imported TBR has doubled to more than 46,000 tonnes in FY17. More than one lakh tonnes of rubber have landed in India in the last three years through TBR import.

However, PC Cyriac, Working President of the Indian Farmers Movement (Infam) was of the view that either anti-dumping duty or safeguard duty should be levied on all other cheap products being imported from China to help the local industry survive.

‘Local industry in doldrums’

However, the government has chosen to levy this duty only on tyre imports, purportedly to please the tyre industry. At the same time, natural rubber is continuously being imported into the country in huge quantities, at a low import duty. These huge imports have ruined the small rubber growers and the indigenous production of natural rubber has fallen from 9 lakh tonnes to 6 lakh tonnes.

The Centre can levy safeguard duty on the imported rubber and thus save the small rubber growers. But while levying additional duty on tyre imports, the government has not taxed additional duty on rubber imports. The requests made by the small rubber growers for levying the safeguard duty on rubber imports are kept pending by the Commerce Ministry for more than a year without any action.

“Obviously the government is keen to make the tyre industry more profitable, is not willing to save the small rubber growers who are sinking,” he added.