ATMA asks for policy enablers for sustained momentum in tyre exports

Notwithstanding challenges to the global economy due to recessionary conditions, rising interest rates, political turmoil and slowing of external demand, tyre exports from India continued with its growth momentum and witnessed a growth of 9% in FY23.  In FY22, the growth in tyre exports from India was a significant 50%.

Indian Tyre Industry is fast integrating with global supply chains helped by the globally aligned regulatory environment in the country that has led to an increase in the addressable market for Indian manufactured tyres.

The spend on R&D by major tyre companies in India has gone up three fold from 0.5-0.6% of revenue 6-7 years ago to about 1.5% currently which compares favorably with the world average and puts India at the vanguard of cutting edge technologies aiding in exports too.

Certain roadblocks faced by the Tyre Industry domestically need to be addressed on priority to provide a fillip to the domestic production and exports. These concerns pertain to accessing Natural Rubber (NR) the key raw material in which India is vastly deficient and import is the only source to bridge the gap. Tyre industry needs to adhere to pre-import conditions for NR import against (tyre) export obligation. This makes the operations very constrictive and affects export performance.

ATMA asks for level playing field to double exports from India

For second successive year in FY 2018-19, the exports of automotive tyres from India went up in double digits in rupee terms, fresh data released by Ministry of Commerce has shown. Tyre exports reached 12890 crore in FY19, a growth of 15% over previous year’s export figures.



ATMA has communicated to the Government that tyre Industry has potential of doubling exports from India in the next 3-4 years if a level playing field is granted matching other tyre manufacturing countries.


Natural rubber is a critical raw material however gap between domestic NR supply and demand is widening. Current NR production is able to meet just about 50% of domestic demand.  Import of NR is imperative for tyre plants to run. However the policy environment is highly restrictive. Custom Duty (on NR Imports) is at 25%, much higher than the rate of duty levied by any other NR importing country.


There are further road blocks in accessing natural rubber. Tyre industry needs to adhere to pre import condition for NR import against (tyre) export obligation. Further export obligation period (for tyres) has been reduced from 18 months to only 6 months making it tough for the industry to access a raw material which is in short supply domestically.


While tyres can be imported under various Trade Agreements at rates which are much lesser than basic rates of duty, NR is in the ‘negative list’ in most of these trade agreements thus denying Indian industry the opportunity to import NR at concessional rate of tariff.


Tyre Industry seeks duty free import of NR to the extent of domestic deficit so as to get a level playing field. The export obligation period needs to be increased to 12 months like in case of other raw materials and Free Trade Agreements need to be given another look so that they don’t undermine the interests of domestic industry.