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The Central Government recently announced import restrictions on pneumatic tyres used in bicycles, two-wheelers, passenger vehicles, commercial vehicles, and buses, with the aim of boosting sales for domestic tyre manufacturers.
Adding these products under the 'restricted' category means that importers will now require a licence and permission from the Directorate General of Foreign Trade.
Until recently global tyre manufacturers could import their range of tyres to India from anywhere across the globe, without restrictions. However there has been a massive growth in imports of tyres from China and other Southeast Asian countries.
Rupees 33.10 crore worth of imports were registered over the financial year 2019-20 as compared to the Rs 26.10 crore registered over the preceding financial year.
The government has taken these measures to promote local manufacturing, and to help reduce import bills of non-essential goods. The country's imports stood at Rs 46,700 crore for the last financial year - a reduction of roughly 10 percent via the Make-in-India initiative.
The government's recently bid for an "Aatmanirbhar Bharat" and has coined the 'Vocal for Local' slogan in an attempt to make India self-sufficient once the Covid-19 crisis has passed.
While the restrictions are limited to imports of tyres at the moment, the scope for it expands across the entire equipment industry. Most automotive companies in India import ancillaries, electronic components, and sometimes batteries from China.
This equipment that is imported are crucial parts of every vehicle. With demand currently at an all time low, companies are looking at ways to boost sales, and in turn, manufacturing - all of which will help the economy.
In addition, the Government has been aggressively pushing for electric and sustained mobility that currently relies heavily on imports of basic components.
Pneumatic tires are made of synthetic rubber, natural rubber, fabric and wire, carbon black and other compounds. They consist of a body, and a tread - the body provides containment for a quantity of compressed air, and the tread provides traction.
Thoughts About The Restriction On Imports Of Tyres
This is promising for domestic manufacturers, and in turn end customers, and will also boost micro-economies. However, importing equipment and components will continue unless the Government aggressively extends aid to local manufacturers.