The commerce ministry has recommended imposition of countervailing duty on Chinese tyres for buses and lorries, a move aimed at guarding domestic players from imports that are subsidised by the neighbouring country. The ministry's investigation arm Directorate General of Trade Remedies (DGTR) in its findings after a probe has stated that imposition of definitive countervailing duty is required to offset subsidisation.
"The authority considers it necessary to recommend imposition of definitive countervailing duty on the imports of the subject goods (New Pneumatic Tyres for Buses and Lorries) from China," the DGTR has said in a notification.It said since the product already attracts anti-dumping duty from China, the amount of countervailing duty to be imposed would be the difference between the quantum of specified countervailing and anti-dumping duty payable.The finance ministry takes final call for imposition of the duty.
The directorate carried out the probe following complaints from the Automotive Tyre Manufacturer's Association. They have filed a petition on behalf of domestic producers for imposition of the duty on these imports.The DGTR said the domestic industry has contended that China is providing countervailable subsidies to the producers and exporters of these tyres.
According to the petition of the association, subsidies by China are being provided by them under different programmes such as grants, tax incentives, preferential lending, export financing and export credit, and equity support.Imports of these tyres from China increased to 81,896 tonne in 2016-17 from 30,665 tonne in 2014-15.Countervailing duty is a country-specific duty which is imposed to safeguard the domestic industry against unfair trade subsidies provided by the local governments of the exporting nations.
India has already imposed countervailing duty as well as anti-dumping duties on various kinds of products from China, with which India has a huge trade deficit. Trade deficit with China increased to USD 63.12 billion in 2017-18 from USD 51.11 billion in 2016-17.