Record-Breaking Export Performance
Indian tyre manufacturers achieved an unprecedented export value of Rs 27,312 crore during the 2025-26 fiscal year, marking a 9 per cent increase from the Rs 25,057 crore reported in the prior period. According to data released by the Ministry of Commerce, this growth trajectory marks the second consecutive year of steady expansion, despite significant headwinds including rising logistics costs and global economic instability.
Context of Industry Growth
The Indian tyre industry has undergone a massive transformation over the past five years, supported by nearly Rs 30,000 crore in capital expenditure for both greenfield and brownfield capacity expansions. With an annual industry turnover now estimated at Rs 1 lakh crore, exports have become a critical pillar of revenue, currently accounting for more than one-fourth of the sector’s total production volume.
Shifting Market Dynamics
The United States remains the primary destination for Indian tyres, representing 15 per cent of total export value at Rs 4,082 crore. This dominance faced challenges in August 2025 when the US administration doubled duties on Indian imports to 50 per cent, causing the US market share to dip from 17 per cent in the previous year. A subsequent adjustment in February 2026, which lowered these duties to 18 per cent, provided a vital reprieve for domestic exporters navigating high-tariff environments.
Beyond North America, Indian manufacturers have successfully diversified their footprint across Europe and South America. Germany, Italy, Brazil, and France collectively represent a significant portion of the export portfolio, signaling that the industry is no longer over-reliant on a single trade partner. This geographical diversification is a direct result of strategic efforts to penetrate new markets amidst shifting global trade policies.
Expert Perspectives and Structural Challenges
The Automotive Tyre Manufacturers’ Association (ATMA) credits this performance to a combination of national policy support and aggressive cost optimization strategies. By streamlining supply chains and improving production efficiencies, manufacturers have managed to sustain growth despite the logistical strain caused by the ongoing West Asia crisis. These geopolitical tensions continue to introduce volatility into energy pricing and maritime freight costs, forcing firms to maintain high levels of operational agility.
Future Outlook and Industry Implications
As the industry looks toward the next fiscal cycle, the integration of India into global value chains remains a top priority. Analysts suggest that the expansion of bilateral trade agreements will play a decisive role in sustaining this export momentum. Moving forward, stakeholders should monitor how the industry manages supply chain stability in the face of persistent energy price fluctuations and whether the current diversification strategy can mitigate the impact of future protectionist trade policies in key Western markets.
