Automotive Tyre Manufacturers' Association

REGIONAL TRADE AGREEMENTS (RTAs) AN OUTLINE WITH REFERENCE TO TYRE INDUSTRY

Trade Agreements are broadly on the following lines:

RTAs (Regional Trade Agreements, can be bi-lateral or plurilateral)
RTAs aim to establish a Preferential Trade Area (PTA) and/or a Free Trade Area (FTA)
Framework Agreement (setting the ground for establishing a Free Trade Area) generally precedes complete FTA.
In case of simultaneous applicability of more than one RTA, trade can take benefit only under one Agreement
RTAs are WTO compatible.

The following are the important and integral components of any RTA:
Rules of Origin : prescribing minimum value addition in exporting country; Preferential/Concessional Rate of Import Tariff: specified as extent/percentage of concession on the MFN rate (i.e. applied/basic rate of normal customs duty);
RTAs have assumed added significance due to slowdown of trade talks at multilateral platforms (WTO), each industry/sector trying to source/sell globally, intense competition, progressive reduction in import tariffs etc.

Tyre Industry Related (key features and practical dimension)

The following RTAs concern tyres and raw materials of tyre industry:

a)     Asia Pacific Trade Agreement (Bangkok Agreement) Tyres and inner tubes can be imported from signatories to the Bangkok Agreement (please see list attached) at concessional rate of customs duty for signatories to the Agreement and specific details, please refer to the statement given below).

b)    Indo-Sri Lanka Free Trade Agreement Tyres can be imported at nil customs duty. Natural Rubber is in the Negative List of India. Several other raw-materials of tyre industry are eligible for duty concessions of varying magnitude.

c)     SAPTA (SAARC Preferential Trading Agreement) Truck & Bus, LCV and Jeep tyres and select raw-materials of tyre industry can be imported into India at concessional/Nil rate of duty from signatory countries, (viz. Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka) Reference statement given below.

d)    India-Singapore Comprehensive Economic Co-operation Agreement: Truck / bus, passenger car (bias) and other Bias tyres can be imported into India at Nill custom duty.

e)    India-South Korea CEPA:Tytes in the Negative List (Excluded from Tariff Concession).
Select raw materials of tyra industry eligible for Nil/Concessional Customs duty from 2015 onwards.

f)    ASEAN Agreement:Key tyre categories tariff to be brought down to 5% by 2016.
Select raw meterials of tyra industry eligible for Nil/Concessional Customs duty from 2013 onwards.

PREFERENTIAL TARIFF FOR TYRES / RAW MATERIALS OF TYRE INDUSTRY

Under Bi-lateral / Regional Trade Agreements

HS Classification	Product/ Category	Basic Customs Duty	Asia Pacific Trade Agreement	India-Sri Lanka	SAFTA	Indo Singa-pore CECA	India-South Korea CEPA	ASEAN
	Tyres
4011	New Tyres (All)	10%	8.60%	Nil Duty	Nil* 5%**	Nil (T&B/P. Car-Blas Ply only) + All other tyres	Excluded from Tariff Concession	9%(passenger car, truck / bus and scooter / motercycle) 7.5% (other categories of tyres).
4011 30 00	Aero Tyres	3%	2.58 %	Nil Duty	1.5%	0.75%	1% in 2016	Nil duty in 2013
4012 20 00	Used Rubber Tyres	10%	Not Covered	In Negative List	Not Covered	5%(Applicable for Solid Tyres only)	Excluded from Tariff Concession	5% duty in 2016
4012 10 00	Retreaded Tyres	10%	Not Covered	In Negative List	-do-	Not Covered	Nil duty in 2016	Not Covered
4013 10 00	Inner Tubes	10%	8.60%	Not Covered	Not Covered	Not Covered	Nil duty in 2016	Nil duty in Dec 2013
	Raw-Material(s)
4001 21 00	Natural Rubber	20%	16%	Negative List	Negative List	Not Covered	Excluded from Tariff Concession	Excluded from Tariff Concession
4001 10 00	NR Latex	70%	39.9%	Negative List	Negative List	-do-	Excluded from Tariff Concession	Excluded from Tariff Concession
5402 10 10	Nylon Tyre Yarn	10%	Not Covered	Negative List	Nil *	-do-	Not Covered	Not Covered
5902 10 10	NTC Fabric	10%	-do-	7.5%	Not Covered	-do-	5% duty in 2018	Nil duty in 2016
7312 90 10	Steel Tyre Cord	10%	-do-	Nil Duty	Nil*	Not Covered	Nil duty in 2016	Nil duty in 2013
5902 20 00	Polyester Tyre Cord	5%	-do-	3.75%	Not Covered	Not Covered	Nil duty in 2014	Nil duty in 2016
2803 00 10	Carbon Black	5%	4.3%	Nil Duty	Nil* 5%**	Not Covered	2.5% duty in 2018	Excluded from Tariff Concession
3824 90 25	Precipitated Silica	7.5%	Not Covered	Nil Duty	Nil* 5%**	Nil Duty	Nil duty in 2016	Not Covered
2817 00 10	Zinc Oxide	7.5%	-do-	Nil Duty	Negative List	Not Covered	Excluded from Tariff Concession	Not Covered
2907 21 00	Resorcinol	7.5%	-do-	Nil Duty	Nil* 7.5%**	3.75%	Nil duty in 2016	Nil duty in 2013
7217 90 99	Bead Wire	Nil	-do-	Nil Duty	Not Covered	Not Covered	Nil duty in 2016	Nil duty in 2013
2823 00 10	Titanium Dioxide	10%	Not Covered	Nil Duty	Nil*	5%	Nil duty in 2016	Nil duty in 2013
3823 11 09	Stearic Acid	20%	-do-	Nil Duty	Not Covered	Not Covered	10% duty in 2018	Not Covered
2912 11 00	Formaldehyde	7.5%	-do-	Nil Duty	Nil*	Not Covered	Nil duty in 2016	Nil duty in 2013
2921 41 00	Analiene	10%	-do-	Nil Duty	Nil*	8%	Nil duty in 2013	Nil duty in 2018
2933 71 00	Caprolactum	10%	-do-	Nil Duty	Nil*	Not Covered	Nil duty in 2016	5% duty in 2016
2707 99 00	Carbon Black Feedstock	5%	-do-	Nil Duty	Not Covered	Not Covered	Not Covered	Not Covered
3812 10 00	Rubber Chemicals	7.5%	6.97%	Nil Duty	Not Covered	Nil (Antioxiedant)	Nil duty in 2016	Nil duty in 2013
4002 90 00	VP Latex	10%	Not Covered	Nil Duty	Not Covered	Not Covered	Nil duty in 2016	Nil duty in 2018
4003 00	Reclaimed Rubber	10%	-do-	Negative List	Negative List	-do-	Excluded from Tariff Concession	5% duty in 2016
3910 00 00	Silicone Emulsion	7.5%	-do-	Nil Duty	Not Covered	-do-	Nil duty in 2016	Not Covered
2503 00 90	Insoluble Sulphur	5%	-do-	Nil Duty	Not Covered	Nil	Not Covered	Not Covered
2712 20 10	Paraffin Wax	10%	-do-	Nil Duty	-do-	Not Covered	Not Covered	Not Covered
4002 70 00	EPDM	10%	-do-	Nil Duty	-do-	6.5%	No Concession	5% duty in 2016

SAPTA-SAARC Preferential Trade Agreement.

ISL- FTA :Indo-Sri Lanka Free Trade Agreement.

Position in respect of other agreements referred to in ATMA Note

1. Framework Agreement on Establishing Free Trade Area (FTA) between India and Thailand, Tyres or raw-materials of Tyre Industry are NOT included in the list of 82 items (Preliminary List) for early implementation.

Notes:

1. ISL FTA : Along with Natural Rubber, Reclaimed/Waste/Retreaded/Used Rubber included in NEGATIVE LIST of India.

2. SAPTA - Valid only when imported from Bangladesh, Maldives, Nepal and Bhutan. Not applicable on imports from Pakistan and Sri Lanka.

3. Not Covered implies that the particular item/raw-material is not included in the list for any preferential / Concessional treatment, or otherwise.