If New Delhi takes restrictive measures, Reuters will face fines for not doing so. Mumbai: Traders seeking licenses to import tires must submit an undertaking stating that they will only buy tires that are not made locally. If New Delhi tries to restrict imports and encourage local manufacturing, it will be penalized.

The Directorate General of Foreign Trade (DGFT) has asked importers to provide relevant records for the last three years. In the last three years, they were allowed to import only 40% of their average trade volume. The Economic Times reviewed the text of the commitment.

DGFT in 2019 “We request you to import only non-Indian tires as per the license issued by the agency,” the year to importers said in a letter

Sources told The Economic Times that around 170-200 traders have filed affidavits for import licenses so far.

India had brought tire imports under the restricted category in June to prevent dumping, especially from China. The company now needs an import license for tires. So far, the government has only issued licenses to companies seeking to import tires that are not available domestically, industry sources said.

One importer, who requested anonymity, said, “Why do they call it a restriction? They say it is prohibited,” he said.

Importers argue that restrictions on imported tires violate the concept of free market. They say it also prevents domestic manufacturers from lowering prices and upgrading investment in technology.

According to an October 19 report in The Economic Times, automakers had previously criticized the government for not allowing cars sold in India to import tires from China.

Traders also find it difficult to determine whether a particular size of tire is being sold in India due to the large number of manufacturers in the country. They face the risk of being sued by the state and its large portfolio. Even within tire sizes, the speeds and loads of particular tires can vary.

According to the Automotive Tire Manufacturers Association (ATMA) data, tire imports have been declining in the last three years and are expected to decline in 2020 In the same period of the fiscal year, the revenue of the domestic companies will be Rs 600 billion.