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Crucial time ahead for tyre companies

The next three months will be crucial for the Indian tyre biggies such as JK Tyres, MRF, Apollo Tyres and Ceat as legal and regulatory bodies such as Supreme Court, Competition Commission of India and Tariff Commission will pronounce their verdicts on a spate of contentious issues. Manu P Toms reports.

autos Updated: Jan 18, 2012 21:57 IST
Manu P Toms

The next three months will be crucial for the Indian tyre biggies such as JK Tyres, MRF, Apollo Tyres and Ceat as legal and regulatory bodies such as Supreme Court, Competition Commission of India and Tariff Commission will pronounce their verdicts on a spate of contentious issues. The issues range from import of radial tyres to cartelisation and tyre pricing structure.

Following the removal of anti-dumping duty on imported truck and bus radial tyres by the department of customs excise and service tax in August 2010, the tyre makers lobbying body — All India Tyre Manufacturers Association (ATMA) — has approached the apex court seeking a reversal of this decision. The SC hearing on this will be on February 23.

The truck makers such as Tata Motors, global tyre majors such as Bridgestone, truck operators’ lobby and importers contested the objection raised by the ATMA that import of radial truck and bus radials impacted domestic tyre makers. The user industries, mainly truck operators and manufacturers, argued that domestic radial tyre manufacturing capacity is too small to serve the demands of India’s truck and bus market.

Meanwhile, Tariff Commission is investigating into pricing structure of the domestic tyre market. The pricing of tyres in relation to raw material price is the matter of contention. The Tariff Commission is expected to submit its final report to the ministry of commerce and industry this month.

The hearing at Competition Commission of India on All India Tyre Dealer Federation’s petition that tyre makers have made a cartel, controlling prices and production has been completed and a verdict is expected by the first week of March.

“These are matters of subjudice. We are awaiting outcomes,” said Rajiv Budhiraja, secretary general, ATMA said a out multiple tussles.