Tyre exports from India follow and comply with the guidelines of the Foreign Trade Policy of India

Rajiv Budhraja

Director General, Automotive Tyre Manufacturers’ Association (ATMA)

ATMA, the voice of the Indian Tyre Industry, acts as a conduit between the Indian Tyre Industry and the Indian Government. Rajiv Budhraja, Director General, Automotive Tyre Manufacturers’ Association (ATMA) highlights the challenges faced by the tyre industry on the global front and export trends among others initiatives taken for the growth of the tire industry. Excerpts…       

What are the different challenges being faced by the tire industry on the global front that needs to be addressed in the wake of the ever-changing economic environment?

The key challenges faced by the tyre sector on the global front include:

Tyre Exports      

Tyres manufactured in India are exported to more than 100 countries globally and compete with the best in the world in terms of technology and quality across the globe.           

However, the Indian tyre sectors suffers from a ‘comparative disadvantage’ across a large no. of FTAs/RTAs wherein tyres imported into India by its FTA/RTA partner countries attract a much favourable import duty vs. duties attracted by tyres exported from India to other countries. Indian tyre sector also faces a large no. of tariff and non-tariff barriers across export destinations.      

It is submitted that the Government may please revisit and re-negotiate such cases where Indian Tyres suffer a disadvantage as a part of an FTA/RTA and also address issues/challenges related to tariff and non-tariff barriers faced by Indian Tyre Exports.       

Impact of Coronavirus

China is a key supplier of steel-based raw materials and rubber chemicals used in the manufacture of tyres. While the Tyre Industry is not faced with an immediate crisis, if the current situation (in China) extends beyond few weeks/months and normalcy is not restored, it may lead to disruptions in supply chain.

The Government is requested to take appropriate steps to ensure supply of essential raw materials for the manufacture of Tyres. A detailed submission by the Tyre Industry has been made to the Union Finance Minister on the subject.              

Tell us your views on Indian tyre majors going global in a serious bid to integrate national and international operations.               

With Indian tyre majors exporting tyres across the world and international tyre companies having their presence in India, integration of national and international operations and supply chains is essential for smooth functioning and compliance w.r.t global regulations and standards.  

Tell us about the export trends in the Off-Highway Tire segment. What are the top 10 export markets for the segment?

Off Highway tyres are a promising segment poised for double digit growth in exports from India. Countries in Europe, North America and Australia are top export markets in this segment.     

What are the policy guidelines the Indian tire segment has to follow for smooth export process?

Tyre exports from India follow and comply with the guidelines of the Foreign Trade Policy of India. However, a large no. of tariff and non-tariff barriers (across export destinations) adversely impact tyre exports from India to the world. Moreover, the Indian tyre industry also suffers from a ‘comparative disadvantage’ across a large no. of FTAs/RTAs wherein tyres imported into India by its FTA/RTA partner countries attract a much favourable Import duty vs. duties attracted by tyres exported from India to other countries.               

There is an increase in tyre exports after two years of sluggishness. What are the factors contributing towards this rise?

The Indian Tyre Industry has, over the last 5-6 years, invested in creating capacity to cater to both domestic and export demand. While the tyre Industry has surplus capacity to meet both domestic and export demand, the ongoing slowdown in the domestic market has made tyre companies focus more on exports in the last 1-2 years.   

How has the advent of BS-VI helped the tyre export business?

With Auto OEMs focusing on exports (in light of the current slowdown in the Indian Automobile Industry) and in view of the possibility of exporting unsold BSIV stock (post 31^st Mar 2020), Indian manufactured Tyres fitted on vehicles exported from India will help increase Tyre exports from the country.       

It is however, submitted that all vehicles being exported from India be fitted by Indian manufactured Tyres (as there exists sufficient domestic capacity for Tyres and Indian manufactured Tyres meet global standards and quality in every respect).               

Could you highlight ATMA’s role towards the growth of the Indian tire segment?

ATMA has, over the last 45 years (since its inception in 1975), been the voice of the Indian Tyre Industry and acts as a conduit between the Indian Tyre Industry and the Indian Government. ATMA has been highlighting the issue/challenges w.r.t increasing tyre Imports into India especially from China and Thailand (Anti- Dumping Duty on Chinese Truck and Bus Tyre Imports into India is in place already).          

ADD on Truck and Bus Radial Tyre Imports into India from Thailand has been initiated by the Government. ATMA has also, as a part of its submissions, requested for a conducive policy framework w.r.t ease of doing business so as to remove operational bottlenecks faced by the Tyre Industry w.r.t domestic and international (incl. exports) operations. 

How does ATMA ensure smooth functioning of the industry with sectors having direct/indirect linkage – Tyre Dealers, Transporters, Customers, etc.?

ATMA, while discussing policy/Industry issues with the Government, takes into consideration views of all stakeholders (across the tyre value chain) – tyre dealers, transporters, Auto OEMs, rubber growers. Needless to say, smooth and efficient functioning of the Tyre Industry requires all stakeholders to be aligned together.

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