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Auto makers in India get nod to buy China tyres

Hyundai Motor India Ltd, Honda Cars India Ltd, MG Motor India Ltd, Skoda Auto Volkswagen India Pvt. Ltd and Bajaj Auto Ltd are among automakers that have received licences from the foreign trade watchdog to import pneumatic tyres from China, two people directly aware of the development said, in what would be a huge relief to these firms.The people said the Directorate General of Foreign Trade (DGFT) has started issuing licences for importing pneumatic tyres after receiving requests from automakers worried they would be forced to halt production if the government approval was not given.

Such high-quality tyres used in premium vehicles are not currently manufactured in India due to low demand. They are also used in vehicles exports.Following a deadly border clash in Ladakh in mid-June in which 20 Indian soldiers died, India had put import of tyres under the restricted category. This essentially meant original equipment manufacturers (OEMs) and importers for after-market tyres will require a licence to continue importing them. Though the restriction is in general for all tyre imports, most tyres imported by either OEMs or for the after-sales market, are sourced from China. The move was aimed at stopping dumping of low-quality tyres in the after-market.

One of the people cited above said DGFT started granting the licences in the last six to eight days.

“They have received more than 100 such applications not only from automakers but also from importers of premium tyres," said the person, seeking anonymity.Luxury carmakers such as Mercedes-Benz, Audi and BMW have significant quantities of imported content compared to mass-market automakers, due to limited sales volumes of such vehicles in the Indian market.

Queries emailed to Hyundai Motor India, Honda Cars India, Skoda Auto Volkswagen India and Bajaj Auto, on Monday, remained unanswered. A spokesperson for MG Motor India declined to comment.

According to the second person, licences were first given to firms that import tyres for vehicles that are exported and DGFT also scrutinized the type of tyres that are being imported. “Officials were supportive of the automakers right and were not opposed to granting licences. They just wanted to know why these tyres were imported, the quantum of imports and why these tyres were not made in India," the person said, seeking anonymity.

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