TYRE EX­PORTS TO CROSS `12,000 CRORE

Financial Chronicle - - FRONT PAGE - FC BU­REAU

Tyre ex­ports from In­dia are ex­pected to cross Rs 12,000 crore for the first time this fis­cal after hav­ing clocked a turnover of Rs 6,314 crore in the first half of the year.

TYRE ex­ports from In­dia are ex­pected to cross Rs 12,000 crore for the first time this fis­cal after hav­ing clocked a turnover of Rs 6,314 crore in the first half of the year.

Tyre ex­ports have been grow­ing for the past three years. From Rs 8,824 crore in year 2015-16, tyre ex­ports from In­dia went up to Rs 9,658 crore in 2016-17 and crossed the 10K crore mark for the first time to stand at Rs 11,180 crore in 2017-18, in­dus­try body au­to­mo­tive tyre man­u­fac­tur­ers as­so­ci­a­tion (ATMA) said.

“Dur­ing the cur­rent year also tyre ex­ports have con­tin­ued mo­men­tum of the pre­vi­ous two years. The in­dus­try is ex­pected to end the cur­rent fis­cal with an ex­port turnover of Rs 12,000 crore as or­der book po­si­tion is healthy”, said Mr Anant Goenka, chair­man ATMA.

In­dian tyre in­dus­try has been able to in­crease its ex­port com­pet­i­tive­ness due to its in­creased em­pha­sis on re­search & devel­op­ment. Four In­dian tyre com­pa­nies rank amongst the top 20 in the world in terms of R&D spend as a per­cent of sales as well as in ab­so­lute R&D spend. Cur­rently about 2 per cent of the rev­enue is be­ing in­vested on R&D by tyre in­dus­try, which matches fairly with the global av­er­age.

“In­dia has some of the finest ra­dial tyre man­u­fac­tur­ing fa­cil­i­ties. In­ter­na­tional ve­hi­cle ma­jors (OEMs) have been rolling out ve­hi­cles on In­dia-made tyres. All these have had a rub-off on tyre ex­ports too. Cost ef­fi­ciency and cus­tomi­sa­tion have also helped in mak­ing ex­ports com­pet­i­tive”, said Goenka.

In­dian man­u­fac­tured tyres are be­ing ex­ported to more than 100 coun­tries in the world in­clud­ing the US and Euro­pean coun­tries. In fact US is the largest ex­port des­ti­na­tion for In­dian man­u­fac­tured tyres ac­count­ing for 13% of to­tal ex­port turnover. Ger­many is the sec­ond largest with more than 7% share. The top 10 ex­port des­ti­na­tions have sev­eral dis­cern­ing coun­tries in­clud­ing France, Italy and Brazil.

“In­dia pro­duces one of the largest va­ri­eties of tyres man­u­fac­tured any­where in the world. In 2007-08, tyre pro­duc­tion num­bers stood at nearly 80 mil­lion units. The same has in­creased to nearly 180 mil­lion units in FY 2017-18”, added Goenka.

While pri­vate in­vest­ment growth has re­mained muted in In­dia in re­cent years, tyre in­dus­try stands out for the sub­stan­tial in­vest­ments made to sup­port the au­to­mo­bile and eco­nomic growth. An in­vest­ment of nearly Rs 51,000 crore (US$7 bil­lion) has just been com­pleted or is cur­rently lined up in both Green­field and Brown­field ex­pan­sion by the in­dus­try.

The in­dus­try has po­ten­tial to in­crease its ex­port turnover im­mensely if a level play­ing field is granted match­ing other tyre man­u­fac­tur­ing coun­tries, ATMA said. High cus­tom duty of 25 per cent on nat­u­ral rub­ber, port re­stric­tions on im­port of NR and pre im­port con­di­tion for NR im­port against tyre ex­port obli­ga­tion have been hurt­ing the in­dus­try.

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