The Directorate General of Foreign Trade's move to put tyres under restricted category, which meant tyre importers now needed a license to continue importing tyres.
Remember we told you just yesterday that Michelin had put the imports of four-wheeler tyres in India on hold? From what we knew, the French tyre manufacturer's decision followed the Directorate General of Foreign Trade's move to put tyres under restricted category, which meant tyre importers, including Michelin India, now needed a license to continue importing tyres. However, the company has clarified that it has NOT suspended imports of tyres; it has, as a matter of fact, obtained a limited import license. Michelin India will use this licence to also import passenger car tyres in order to tend to the high market demand for its tyres here. However, these imports and their distribution in the country will be restricted for the time being.
In a statement regarding the matter, a Michelin India spokesperson said, "Owing to the ongoing import restrictions for tyres we have experienced supply shortages recently. For Michelin India, Government of India has recently issued a limited import license, which will also be utilized for importing passenger car tyres to address very high demand for our tyres in a restricted manner for the time being. Consequently, to streamline our supply chain in the current situation, Michelin India has decided to prioritize selling of these limited stocks only through its priority partners currently, who has equally invested in expanding our distribution footprint in the country. Michelin is committed to the Indian market and continues to significantly invest in Government of India’s ‘Make in India’ priorities through its Greenfield manufacturing plant for Truck and Bus radial Tyres in Chennai and a state of the art innovation hub in Pune. We continue to work with Government of India to address this issue and are hopeful of an early resolution."
Prior to these new developments, the import of tyres here was unrestricted, which resulted in the market being inundated with tyres from countries such as China. The imports also affected Indian tyre manufacturers, especially due to the inverted duty structure, which meant local tyre manufacturers paid taxes that were higher than the import duty levied on tyres. For Indian tyre companies, this resulted in the lack of a level playing field, thus resulting in the country's government imposing restrictions on the import of tyres.