Product Description – The product under consideration is “New/Unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia code above 16″ used in buses and lorries/trucks” (“TBR tyres”) from China.

HS Code – The product is classified under Chapter 40 of the First Schedule to the Customs Tariff Act, 1975. Tyres are classified under HS code 40112010. Tubes and flaps are classified under HS codes 40131020 and 40129049 respectively. The product is also being imported under the HS code 40118000. The custom classification is indicative and not binding on the product scope.

Countries Involved – China PR

Applicants – Automotive Tyre Manufacturers Association on behalf of Apollo Tyres Limited, J.K. Tyre Industries Limited and MRF Limited

Date of Initiation – 29^th December 2023

Period of Investigation (“POI”) – 1^st April 2022 to 30^th June 2023

Injury Period – Financial Years 2019-20, 2020-21, 2021-22 and POI

Past Investigations involving the product –

1. Countervailing duty on imports of TBR tyres was recommended vide final findings No. 6/8/2018-DGAD dated 25^th March 2019. These were levied by the Ministry of Finance vide Customs notification no. 1/2019-Customs (CVD), dated 24^th June 2019.
2. TBR tyres were earlier attracting anti-dumping duty till 17^th December 2022.

Key Findings –

1. The scope of the product under consideration includes “New/Unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia code above 16″ used in buses and lorries/trucks”, imported under HS codes 40112010 and 40118000. Inclusion of imports under HS code 40118000 does not amount to enhancement of product under consideration as the product description of imports is dispositive and customs classification is indicative.
2. Volume of subsidised imports have increased during POI, particularly under HS code 40118000.
3. Subject imports were significantly undercutting the prices and cost of the domestic industry. CIF price of imports is also below raw material costs of domestic industry.
4. Performance of the domestic industry, in terms of volume and profitability parameters have improved throughout the injury period.
5. There is likelihood of recurrence of injury given recent increase in imports, continuation of subsidies provided to exporters, trade remedial measures imposed globally on Chinese exports, significant exports from China to rest of the world at a price below selling price, cost of production and non-injurious price for the domestic industry, significant capacity additions and unutilised capacities in China.
6. Exporters failed to provide complete details of their exports of TBR tyres exported under HS code 40118000. They also failed to provide any information on likelihood parameters. Therefore, exporters were found to be non-cooperative. The quantum of CVD recommended for all Chinese exporters is 17.57% of CIF value, which is the residual duty determined in the original CVD investigation.
7. The continuation of duty would be in public interest, since the demand has increased in India and none of the users have participated to oppose continuation of countervailing duty. The impact of continuation of duty will be only 0.0322% on the eventual product. There is inter se competition in India amongst multiple producers to maintain fair prices. Indian industry has sufficient capacity to cater to the entire Indian demand. Further, Indian industry largely sources their raw material from Indian upstream producers and undertakes several joint development programs including promotion of natural rubber production in northeast regions.