Locally made size will be excluded from Tyre Import Licences

· Import of Tyres if Alternative made in India, Seeks Undertaking from Importers

· Applicants to give Undertaking to this effect

Traders seeking tyre import licences must submit an undertaking that they will only purchase those tyres sizes not made locally. Failure to do so will attract penalties as New Delhi seeks to curb imports and push local manufacturing.

The Directorate General of Foreign Trade (DGFT) has sought the undertaking from importers that are also required to furnish records for the past three years. They are being allowed to import only 40% of their trade average volume in the past three years.

“You are hereby requested to ensure that only those tyres which are not manufactured in India are imported as per permission granted by this directorate,” DGFT wrote to one importer in a letter.

About 170-200 traders have so far submitted the affidavits to seek import licences, sources said.

India moved the import of tyres into the restricted category in June to prevent dumping, especially from China. Now businesses need a licence to import tyres. Industry participants say that the government has so far issued licences only to those that seek to import tyres for sizes not available locally.

Importers argued that curbs on imported tyres were against the free market philosophy. It also prevents domestic manufacturers from bringing down prices and investing on technology upgrades, they said.

Earlier, vehicle manufacturers had accused the government of not allowing the import of tyres from China to be used on vehicles meant to be sold in India even if those tyres were not available locally.

Traders also argued that it was difficult to know for certain if a given tyre size was not available in India given the large number of manufacturers operating in the country and their vast portfolios, putting them at risk of prosecution. Even within one tyre size, there could be specification differences with regard to the speed and load that a given tyre can handle.

Tyre imports have been declining for the past three financial years and came in at Rs 2,612 crore in FY20 against an estimated domestic industry sale of Rs 60,000 crore for the domestic players during the same period, according to the Automotive Tyre Manufacturers’ Association (ATMA).