Mumbai, June 25 (IANS) Stocks of domestic tyre manufacturers rose on Tuesday after the government imposed a countervailing duty on particular type of tyres imported from China for a period of five years.
The import CVD is a country-specific levy that is imposed to offset subsidies given by foreign governments and to protect domestic industry.
In a notification, Ministry of Finance’s Department of Revenue said it has imposed import CVD on “new or unused pneumatic radial tyres with or without tubes and or flap of rubber (including tubeless tyres), having nominal rim dia (meter) code above 16″ (inches) used in buses and lorries or trucks”.
The import CVD which ranges from 9.12 per cent to 17.57 per cent of the CIF value is in addition to the anti-dumping duty imposed two years ago.
On Tuesday, the stock of JK Tyre and Industries rose 4.66 per cent to Rs 79.80 at the BSE. Similarly, the scrip of CEAT rose 4.30 per cent to Rs 941.60, of Apollo Tyres rose 0.50 per cent to Rs 200.35 and of MRF by 1.47 per cent to Rs 55,536.80.
“Indian government has imposed a countervailing duty on Chinese radial tyres which have above 16 inches rim. These tyres are used in trucks and buses and are already subsidized by the Chinese government,” said Ashwin Patil, Senior Research Analyst, LKP Securities.
“In the wake of current slowdown in the auto industry, this act from GOI would bring some cheer to the tyre companies as the replacement markets would see higher inflow of the tyres coming from the listed or organised players in India.”
Currently, volumes of Chinese tyres have come down from 150,000 per month to 30,000 units per month.
“This would further go down in the coming months post this decision. Positive for stocks like MRF, Apollo Tyres and JK Tyres, which have major presence in the trucks and buses segments,” Patil said.