Tyre Industry demands scrapping of 16% countervailing duty

New Delhi, Feb 2 (UNI) The All India Tyre Dealers' Federation (AITDF), in its pre-budget representation to the Government, has demanded that the 16.32 per cent countervailing duty (CVD) on import of truck and bus radial tyres should be abolished to bring level playing field for tyre trade and tyre users in the larger interest of commercial road transport sector.

''There is already a mismatch in supply and demand of truck and bus tyres in the country as production of commercial vehicles is growing at the rate of 35 per cent annually and the domestic tyre industry is not able to match the market requirement in the same proportion,'' the AITDF said.

Pointing out that the abolition of CVD would be in tune with the growing transportation needs of the manufacturing sector, it said the large-scale induction of truck radials would have direct bearing on reducing the truck rentals and consequently on prices of various items of daily usage by the common man.

''More importantly, it will help to contain the inflationary tendencies in the economy,'' the Federation said, making a strong case for the government to shun its attitude of protecting the oligopolistic domestic tyre industry and effectively open up the avenues for import of top quality, new technology radial tyres in the country.

In a detailed representation to the government, it said the diesel and tyres account for 90 per cent of operating costs of truck operations and this has direct bearing on freight rates and prices of all commodities and manufactured items of common man's use.

Last year the Government had exercised utter restraint in revising diesel prices, the AITDF said, but the tyre manufacturers indulged in frequent and arbitrary price increases of truck and bus tyres.

''The net diesel price hike has been to the tune of one rupee per litre. Only, that is, 3.25 per cent over the previous price level, while truck and bus tyre prices were jacked up by 14-15 per cent in last calendar year,'' it pointed out.

At the same time, the oligopolistic domestic tyre industry has failed to adopt superior technology in manufacture of truck and bus tyres and continues to be wedded to the outdated cross-ply tyre manufacturing technology.

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