HomeCar NewsMichelin India Passenger Car Tyre Sales Affected Due To Import Restrictions (Update)

Michelin India Passenger Car Tyre Sales Affected Due To Import Restrictions (Update)

Michelin India
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Only tyre sizes that are not made in India will be allowed to be imported as per the DGFT restriction

The Indian government’s Directorate General of Foreign Trade (DGFT) moved tyres to the restricted category in June last year in a bid to prevent countries like China from dumping its excess output in our market.

As per the restrictions, the authority has asked tyre importers to apply for an import license by issuing an undertaking that only tyre specifications that are not manufactured locally will be imported.

Tyre Imports in India

In addition to the undertaking, the tyre traders are required to submit their records of tyre import for the last three years. They can only import 40% of this average trade volume.

According to Economic Times, nearly 200 traders have filed affidavits with DGFT to seek tyre import license and only those who import the sizes and specifications that are not locally made are granted permission.

Michelin car tyre
Michelin car tyre

The stake holders of the tyre industry feel that the move by the government is rather a ban than a restriction. According to importers, the restrictions are against the free market philosophy and is going to give undue advantage to the local players who no longer have reason to cut the prices or invest in technology upgrades.

Traders also say that it is difficult to know with certainty if a particular specification of the tyre is being made locally or not since there are several local players with a wide portfolio. Such an unclear scenario may open importers to the liability of prosecution.

It is to be noted that even within a particular size, other specifications like the speed rating and load rating vary, making it very difficult to keep track of what types of tyres are available in the country. In last financial year, the value of tyre imports into the country stood at INR 2,612 cr as against the revenue of local tyre manufactures which is estimated to be INR 60,000 cr.

Michelin suspends passenger vehicle tyre sales in India

As a consequence of the import restrictions, French tyre major Michelin has reportedly issued a circular to its Indian dealer partners confirming that it will not import and distribute passenger vehicle tyres in India until there is further update on this matter from the government.

Thanking its partners for sticking with the brand during the volatile times, the company stated that it will continue to retail two wheeler, bus and truck tyres through its dealership network. Michelin expressed its interest in resuming its passenger vehicle tyre supply to the dealers as soon as there is an improvement in current situation.

Michelin India has not announced this officially yet. But dealer sources confirm that they have received such a circular. DGFT’s move to restrict import of tyres have significantly reduced the choice the customers had and is likely to result in price hikes.

UPDATE – Michelin India Press Statement

“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.”

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