Indian Tyre Industry Expected to Scale a Turnover of INR 1 trillion

The Indian tyre industry is expected to achieve a turnover of INR 1 trillion in the next three years, thanks to new capacities that are becoming available, according to the Automotive Tyre Manufacturers Association (ATMA). Although the external environment remains challenging, the domestic tyre sector is benefiting from several factors that are expected to drive growth, including infrastructure expansion and an increase in economic activity.

Over the past three years, the industry has invested INR 350,000 million in new capacity creation and debottlenecking, and this investment is set to pay off over the next couple of years as the new capacities come online to meet rising demand.

ATMA anticipates that the new capacity will help the industry achieve a turnover of INR one trillion in the next three years, up from the current level of INR 750,000 million. The truck and bus radials (TBR) and passenger car radials (PCR) manufacturing segments are expected to be the primary beneficiaries of this growth.

The Indian tyre sector is benefiting from several tailwinds, despite the challenging external environment. Different segments of the auto sector have already reached or are approaching pre-pandemic levels, creating demand for tyres, while the preference for SUVs in the passenger car market is driving demand for higher profile tyres for 16-inch wheels and above.

India's policy and regulatory environment is designed to foster industry competitiveness, according to Satish Sharma, Chairman of ATMA. The phasing out of older vehicles and the refusal to renew the registration of 15-year-old government vehicles is expected to spur demand for new vehicles and benefit a variety of related industries, including the tyre industry, and begin a cycle of economic growth.