The government’s policy of linking import permissions to investments has resulted in Rs 1,100 crore investment commitments by some of the leading tyre manufacturers of the world like Bridgestone, Michelin and Goodyear, a senior official said.
These tyre companies had sought permission to import a certain category of tyres even though the policy restricts it. The permission was granted after these companies agreed to invest in setting up or expanding their manufacturing facilities in the country in a time-bound manner for the products whose import permission was sought.
In June 2020, the Directorate General of Foreign Trade (DGFT) restricted imports of certain new pneumatic tires for motor cars, buses, lorries, and motorcycles to promote domestic manufacturing. Importers must now apply for an import licence or permission from DGFT to import these tyres.
The imports were temporarily permitted by the department for promotion of industry and internal trade (DPIIT) in return for investment commitment.
Additional applications received from other global players are currently being evaluated under this initiative.
A similar attempt is being made in electric vehicle with Electric Vehicle Policy that allowed lower duty on imports of completely built units if the companies agree to invest in India.
The DPIIT has also asked other ministries to take steps to promote domestic manufacturing of sectors falling under their purview as has been done in the case of toys and tyres, the official said. In case of toys import duties were raised and quality control orders (QCOs) were implemented to bring down imports and give space for domestic industry to grow. This has resulted in the rise of India’s exports of toys by 227 per cent and a decline in imports by 37 per cent in the last ten years.
These efforts have led to India supplying toys to global players like Walmart, Hasbro, Spinmaster, Hamleys,” the official added.
The steps ministries and departments could take include changes in custom duty rate and non-tariff measures such as QCOs, and incentives for the development of the manufacturing ecosystem.
