Indian tire industry poised for double-digit growth over next decade

New Delhi – The Indian tire industry is set to grow at a CAGR of 11-12% over the next decade, driven by high domestic demand, the Automotive Tyre Manufacturers Association (ATMA) has recently forecast.

During the fiscal year ended 31 March, the country’s exports rose 9% year-on-year to INR250.51 billion (€2.5 billion) compared to INR230.73 billion in the previous year.

With an estimated annual turnover of INR1,000 billion, the industry stands out as one of the manufacturing sectors in the country with a “high export-to-turnover ratio,” ATMA said.

According to the industry association, the growth was driven by “sustained investments in capacity, robust manufacturing activity, and focused R&D.”

“Over the past three to four years, tire manufacturers have invested INR270 billion across greenfield and brownfield projects, underscoring their strong belief in India’s economic trajectory,” said Arun Mammen, chairman, ATMA.

Citing a 'PwC vision document', ATMA said the industry was expected to grow at a CAGR of 11-12% until 2047.

“Rising domestic demand, increasing export potential, and ongoing technological advancements are key drivers of this sustained momentum,” it added.

“While global macroeconomic challenges persist, the Indian tire industry is built on strong fundamentals,” said Mammen.

The growing domestic market, he went on to say, ‘better insulates’ the industry against global shocks.

Indian tires were mainly exported to the US, EU, Latin America, and Southeast Asia.

The US remained the top export destination, accounting for 17% of India’s tire exports by value, followed by Germany (6%), Brazil (5%), UAE (4%), and France (4%).

Segment-wise, farm/agricultural tires and off-the-road (OTR) tires dominated exports, together comprising nearly 60% of the total export value.

Commenting on recent trade developments, Mammen said, the industry was “closely monitoring” the situation regarding potential US tariffs.

“We strongly advocate fair trade practices and a level playing field. At the same time, the Indian tire industry remains committed to diversifying its export markets and sustaining growth.”