Inferior quality radial truck tyres from China disguised as bias tyres (tyres bound in crisscross rubber and other material having less fuel-efficient design than the standard radial tyre) are circumventing India’s import norms. As a result of which, despite a recent notification squeezing imports of radial tyres from China and Thailand, the tide of imports continues unabated.
Radial truck tyres and bias truck tyres look the same to an untrained eye and they have almost the same function. But industry experts caution that the technical and performance characteristics differ due to quality of materials and technology used in the manufacturing.
“If the import is by ‘actual users’ (OEs/vehicle manufacturers, fleet operators etc), the tyre industry has no issue,” a spokesman of ATMA (Automative Tyre Manufacturers Association) clarified, when contacted. But the Indian tyre industry is also quick to point out that it is often traders without high credentials who are in this low quality game.
At the same time, there is exponential increase in the volume of truck and bus tyre imports. BY DGCI statistics, from 2002, truck & bus tyre imports cumulatively rose by a 1652%.
The safety aspect involved in the export of low quality radial tyres by the Chinese is already an issue, triggering consignment rejections and even legal suits in the US and Australia.
ATMA has pointed out in a note last week to the commerce ministry that many of these imports are by small traders “who resort to all sorts of malpractices to evade taxes, duties and levies by indulging in unfair practices like wrong classification, mis-declaration, under-invoicing etc of imports.”
This could have two vital impacts. One, the safety of the vehicles is in jeopardy, as the products do not have any warranty.
Two, since such imports are on cash-basis, there is an evasion of 12.5% VAT on tyres.
The only way to effectively stop import of poor quality radial tyres in other guises would be inclusion of bias tyres too on the restricted category list, says Raghupathi Singhania, chairman, ATMA.
FE had earlier reported that using the tariff loophole offered by some regional trade pacts, Chinese truck tyre imports are up from 750,074 tyres (in 2006-2007) to 1,187,939 tyres. As much as 91% of the tyres imported to India are now from China.
Reacting to the reports, DGFT had placed the import of radial truck and bus tyres (HS Code 4011 20 10), in the ‘restricted category’ and allowed import of tyres by actual users, including vehicle manufacturers. This was through notification No 64 (RE-2008)/ 2004-09 dated 24th November, 2008.
The decision came in the wake of the tyre industry’s plea to the government to check the surge in imports, particularly dumping/cheap priced imports from China by independent importers, causing damage to the industry.