DGFT Policy of the imports of used tyres: Restricted Articles and Compliance Requirements

Introduction

Automobile business is among the booming industries in India. As the number of vehicles sold increases so does the consumption of tyres. A tyre, however, has a limited life span. Tyres become worn out and have to be disposed of after use. Although some of them can be retreaded, millions of tyres are end-of-life tyres (ELTs) every year.

In the world, 1.5 billion tyres are disposed every year. These non-biodegradable tyres pose a great challenge to waste management. In India, an annual production of 3 million tonnes of tyre waste takes place. In addition to the local production, companies and entrepreneurs tend to consider the possibility of importing worn tyres in other nations to recycle, retread, or pyrolyze them.

However, the importation of used tyres to India is not a free trade activity. This is controlled under the policy of DGFT (Directorate General of Foreign Trade) and is classified as restricted items. This implies that such imports cannot be permitted unless such approvals as a valid dgft tyre import license and environmental clearance are obtained.

The Global Problem of Used Tyres

It is well worth looking at the international dilemma before knowing the policy of India:

• Non-biodegradable: Tyres take hundreds of years to be eliminated.
• Health risks: Tyre Mountains trap precipitations, which serve as habitat to mosquitoes which transmit diseases such as malaria and dengue.
• Fire hazards: Tyres are very combustible. When they are lit, they cause poisonous smoke and are hard to put out.
• Toxic emissions: Carcinogens, heavy metals and particulate matter are emitted in informal burning or pyrolysis.
• Waste of resources: Tyres have reusable steel, rubber and carbon black. Unless recycling is done, precious resources are wasted.

Due to the dangers a lot of countries have enforced the use of tyre imports by means of systems such as dgft restricted items import license and dgft license to import which guarantee environmental security and safe recycling.

Why Companies Import Used Tyres

• Retreading – It is always possible to retread some of the used tyres with strong casings and have a longer usage.
• Pyrolysis – Tyres are subjected to the heat without oxygen presence to produce tyre oil, carbon black and steel (not allowed now without polluting the air).
• Crumb Rubber Production – Tyres that have been used can be torn to crumb rubber that is used in playgrounds, sports fields and roads.
• Industrial Applications- Crumb rubber is used to improve asphalt in the construction of rubbered roads.

Nevertheless, such operations are permitted on the recommendation of environmental and trade licence, such as dgft tyre import licence and MOEF clearance.

DGFT Policy on Tyre imports of used tyres

Limited Items Classification

• As per the Foreign Trade Policy of India, used tyres are classified as the restricted imports.
• Importation requires the importers to seek a dgft restricted items import license.

Legal Framework

• Under the Foreign Trade (Development and Regulation) Act, 1992.
• DGFT makes a notification in ITC (HS) Classification of Export and Import Items.
• Tyres that are used are specially identified with the use of restricted ITC (HS) codes.

Role of MOEF&CC

• All imports as required by Hazardous and Other Wastes Rules, 2016 are supposed to be approved by the Ministry of Environment, Forest and Climate Change.
• MOEF makes sure that only recycling or retreading of tyres in authorized plants are imported.

Role of DGFT

• The dgft import license is granted by DGFT on the condition of no objection certificate of MOEF (NOC).
• DGFT will not grant a dgft license to importation of used tyres without the permission of MOEF.

Customs Verification

• The customs will not clear the consignments until dgft tyre import license, dgft tyre certificate and MOEF approvals are offered.

The reasons behind the restrictions of used tyres

• Dumping Risk – Developed countries dump tyre wastes to the developing markets.
• Pollution Issues – improper recycling causes serious pollution.
• Public Health – Workers and communities are the ones that are affected by toxic emissions.
• Unregulated Pyrolysis- In most plants, the emissions are not regulated.
• Recycling Capacity – The surplus imports to India can be a burden to its approved recycling services.

Therefore, the classification of used tyres under dgft section of the classification of goods imported in DGFT makes sure that there is control, transparency and accountability.

Compliance Requirements for Importing Used Tyres

Step Company Eligibility

• None other than a registered recycler or retreaders with SPCB/CPCB permission can be granted a dgft tyre import license.
• Those traders who do not have the recycling capacity are not eligible.

Step Documentation and Necessary

• Import Export Code (IEC).
• Incorporation documents.
• Consent from SPCB to operate.
• Recycling capacity and details of facilities.
• Report on waste management and compliance.

Step MOEF Approval

• Apply to Hazardous Substances Division of MOEF.
• Provide the technology specifications and environmental protection.
• MOEF issues a NOC on satisfaction that is needed in the dgft import license.

Step DGFT Authorization

• Open an application online on the DGFT portal.
• Attach MOEF’s NOC.
• Cash government Rs.(1 perRs. 1,000 CIF value; minimum Rs 500, maximum Rs. 1 lakh).
• Dgft license of import is given when approved by DGFT.

Step Customs Clearance

• The MOEF NOC and the dgft have customs checks that restrict the items import license with the clearance.

Step Post-Import Obligations

• Keep import and recycling documents.
• Submit file compliance report to CPCB.
• Disposing should be done at designated recycling points.

Government Fees

• Minor import license fee: Rs. 1 on Rs. 1,000 CIF value.
• Minimum: Rs. 500; Maximum: Rs. 1,00,000.
• Relates to all types of dgft tyre import license and dgft license on import application.

Sanctions against Non-Compliance

• Customs seizing consignment.
• Fines under Foreign trade act, 1992.
• Suspension or cancellation of dgft import license.
• Environmental fines in the Environment (Protection) Act, 1986.
• Deliberate violations that are criminalized.

Close supervision of importers with invalid dgft restricted items import license is highly enforced.

Tyre Recycling Business opportunities

Nevertheless, the recycling industry has high potential in spite of strict control:

• Retreading Units – Increase profitably the life of tyres.
• Crumb Rubber Plants – Infrastructure projects are their main customers.
• Clean Pyrolysis Units – Workable within environmental requirements.
• Reclaimed Rubber Manufacturing -Used in footwear, hoses and mats.
• Cement Kilns – Approval of use of shredded tyres as alternate fuel.

Legal and sustainable participation of the legitimate recyclers in this expanding business is possible with a valid dgft tyre import license.

Future Outlook

• India is heading towards the Extended Producer Responsibility (EPR) of tyre manufacturers.
• Such technologies as clean pyrolysis and cryogenic grinding will be increased.
• DGFT and MOEF are making the dgft license approval process stricter.
• The green recycling market in India is rising to attract increased interest on the part of global investors.
• The government seeks to make sure that all the dgft restricted items import licenses must be linked to verifiable recycling results.

Conclusion

There is DGFT policy on used tyre imports that guarantees safety of the environment and recycling. India eliminates waste dumping by classifying them as restricted items and subjecting an import approval to MOEF compliance and DGFT compliance.

The acquisition of a dgft tyre import license, dgft import license, or dgft license to import is not only a formality issue, but it is an obligation of sustainability and legal trade. The true recyclers and retreaders who abide by these standards will help India in the green economy and make sure that waste is not disposed carelessly.

Concisely, the controlled imports with a valid dgft shielding the environment, employment, and integrity of global trade in India.