The commerce ministry has recommended imposition of definitive countervailing duty on the imports of new Pneumatic Tyres for Buses and Lorries from China. The move is aimed at guarding domestic players from the increase in imports that are subsidised by the neighbouring nation. The ministry’s dumping investigation arm Directorate General of Trade Remedies (DGTR) in its findings after a probe has said that imposition of definitive countervailing duty is required to offset subsidisation.
In its findings, the DGTR said since the product already attracts anti-dumping duty from China, the amount of countervailing duty to be imposed would be the difference between the quantum of specified countervailing and anti-dumping duty payable. It also said the domestic industry has contended that China is providing countervailable subsidies to the producers and exporters of these tyres. The finance ministry takes final call for imposition of the duty. Following a complaint by from the Automotive Tyre Manufacturer's Association, the directorate had initiated the probe. They have filed a petition on behalf of domestic producers for imposition of the duty on these imports.
Countervailing duty is a country-specific duty, which is imposed to safeguard domestic industry against unfair trade subsidies provided by the local governments of the exporting nations. India has already imposed countervailing duty as well as anti-dumping duties on various kinds of products from China, with which India has a huge trade deficit. Imports of these tyres from China increased to 81,896 tonne in 2016-17 from 30,665 tonne in 2014-15. India has a trade deficit of $63.12 billion in 2017-18 with China as compared to $51.11 billion in the previous year.