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Local tyre industry hit by Korean dumping

Feb 10, 2000

The Indian tyre market is facing increasing competition from Korean imports and plans to appeal to the government to impose duties on Korean companies. According to a newspaper report, Korean radials in FY99 accounted for 13% of total passenger car radials market (at 172,000 units). The representative body for the tyre industry - Automotive Tyre Manufacturers Association (ATMA) plans to appeal to the government to either initiate anti-dumping or safeguard duty proceedings against Korean companies.

With Indian tyre companies already operating on low margins, increasing competitive pressure from Korean tyre companies will add to the woes of the industry. Korean imports have increased even further after the entry of Korean auto majors Daewoo (Matiz) and Hyundai (Santro, Accent) in the country. Korean tyre companies can export to India at a concessional duty of 33%, against a normal 40% duty according to the Bangkok Agreement of 1976. Korean companies have exploited this concession to the fullest.

Regardless of ATMAs appeal to the government, the Indian tyre industry will have to get used to competing with increasing imports in future. From 2001 onwards, import curbs will be liberalised considerably and the Indian industry as a whole (and not only tyres) will have pull up their socks to compete effectively with high quality imports.

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