BOUNCING BACK WITH DOMESTIC FOCUS

Despite challenges, India's tyre industry remains optimistic about doubling revenue by 2032

India’s $11 billion tyre industry faces a rough road ahead. Exports, an important source of income for the sector, accounting for roughly a quarter of sales, are currently stagnant. To make matters worse, a 30% surge in global natural rubber prices since the beginning of the year is squeezing profit margins of tyre manufacturers.

While a potential revival in domestic sales offers a ray of hope, the industry’s health rests on its ability to successfully implement price increases. The Indian tyre industry has demonstrated a remarkable ability to pass on cost increases in recent years. Manufacturers have effectively passed on increases in raw material costs to consumers. Recent months have seen further price hikes, demonstrating this continued power.

However, the situation wasn’t always this favourable. Just a few years ago, the sector faced intense competition from cheap Chinese imports. Fundamentally, a lot has changed for the sector.

INDUSTRY EVOLUTION AND GROWTH

India’s tyre industry sets its sights on a global stage. With ambitions to become a future manufacturing powerhouse, the industry is actively contributing to this vision. Indian-made tyres are now exported to over 170 countries, reaching major markets like the EU, US, Brazil, UAE, and UK.

Reflecting this growth, the Automotive Tyre Manufacturers’ Association (ATMA) has set an ambitious target: to achieve US $5 billion in exports and become a top-3 global tyre hub by 2030. This goal represents a big leap from the current US $3 billion export value, which has impressively doubled since fiscal year 2019-2020.

EXPORT SLOWDOWN AND DISRUPTED SUPPLY CHAINS