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Tyre industry asks govt to allow duty-free import of carbon black

An ongoing crunch in the domestic availability of carbon black has forced several domestic tyre firms to shut down units in the recent past: Industry body

ET Bureau|
Feb 19, 2018, 07.36 PM IST
Tyre industry
The demand-supply gap for carbon black in the domestic market has gone up to 20% in FY18, from 14% in the previous financial year: ATMA
Kochi: The Indian tyre industry has asked the government to allow tyre industries to import carbon black on duty free basis, waive the anti-dumping duty on import of the product from China and regulate exports to overcome its shortage in the market.

The crunch in domestic availability of carbon black has reached such an extent that several domestic tyre companies have been forced to shut down units in the recent past, the Automotive Tyre Manufacturers Association (ATMA) has stated in a representation to commerce ministry.

The demand-supply gap for carbon black in the domestic market stood at 14% in the financial year 2016-17. This has gone up to 20% in FY18, said the industry body.

“As it is, the domestic tyre industry is facing the ongoing concern of shortfall in overall availability of Natural Rubber (NR) on a regular basis. Carbon black shortage has only added to the woes of tyre Industry in India,” said Mohan Kurian, convener, ATMA supply chain & resources (SCR) group.

Notwithstanding domestic crunch, steep anti-dumping duty has been imposed on carbon black imports from China, the single largest producer in the world accounting for about 40% of its global production. According to ATMA, tyre industry is left with no other choice but to import carbon black to meet domestic deficit. At the same time, export of carbon black from India needs to be regulated by way of fixing a minimum export price or restricting quantity.

The unplanned cuts in tyre production arising from shortfall in carbon black availability would only lead to higher imports of finished tyres from outside India, thereby, discouraging value addition within the country. Besides, despite substantial investments made by the Indian tyre industry in capacity creation and enhancement, several allied segments will be adversely affected by the ongoing trend, said ATMA, while adding that the crisis would primarily hit the truck & bus radial categories that will suffer due to the shortfall of this essential raw material.

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