India Tyre Industry Seeks Expanded Duty Relief Amid Supply Chain Pressure

The tyre manufacturing sector in India is facing intensifying pressure from global supply chain disruptions and volatile raw material costs, prompting the Automotive Tyre Manufacturers Association (ATMA) to seek broader government intervention. While recent policy support through temporary customs duty exemptions has provided some relief, industry stakeholders believe the current scope remains insufficient to address deeper structural challenges affecting production stability.

Partial Relief Falls Short of Industry Requirements

The government’s decision to temporarily waive customs duties on select inputs such as synthetic rubber and specific resins until June 2026 has been acknowledged as a constructive move. However, ATMA has emphasized that several essential raw materials continue to attract significant import duties despite ongoing price volatility. These include polyester and nylon tyre cord fabrics, bead wire, steel tyre cord, carbon black, and petrochemical derivatives, all of which play a vital role in tyre manufacturing.

Crude Dependency Driving Cost Pressures

A substantial portion of tyre production costs is linked to crude oil derivatives, accounting for nearly 60–70 percent of total raw material expenses. Fluctuations in global crude oil markets have therefore directly influenced manufacturing economics. Additionally, disruptions in key maritime routes such as the Strait of Hormuz and the Suez Canal have escalated freight costs, increased insurance premiums, and introduced shipment delays, further compounding operational challenges for manufacturers.

Critical Component Shortages Raise Safety Concerns

Among the most pressing issues highlighted by ATMA is the shortage of bead wire, a crucial component that ensures tyre structural integrity and safety. Domestic production constraints, largely due to limited availability of industrial gases and LPG, have tightened supply. To mitigate potential disruptions, the association has requested temporary exemptions from Quality Control Order requirements for bead wire imports, enabling smoother procurement from international markets.

Call for Upstream Industry Support

Beyond customs duty adjustments, ATMA has urged policymakers to strengthen upstream supply chains. This includes ensuring consistent availability of sulphur for tyre and insoluble sulphur production, as well as maintaining refinery output of rubber process oils and related feedstocks. The industry is also advocating a gradual transition toward advanced materials such as Neodymium Polybutadiene Rubber and Solution SBR to enhance performance and long-term competitiveness.

Wider Economic Implications of Supply Disruptions

The association has underscored that tyre availability is critical to multiple sectors, including freight transportation, agriculture, and passenger mobility. Any disruption in supply could have cascading effects across logistics networks and rural economies. In particular, shortages of farm tyres could directly impact agricultural operations and distribution efficiency, highlighting the broader economic significance of maintaining stable tyre production.

Industry-Government Collaboration Remains Key

ATMA has reiterated its alignment with national priorities such as domestic manufacturing growth, quality assurance, and supply chain resilience. The industry body stressed that continued engagement between policymakers and manufacturers will be essential to navigate ongoing global uncertainties. Expanding duty relief measures and addressing upstream constraints are seen as critical steps toward ensuring cost competitiveness and uninterrupted production in the months ahead.

Frequently Asked Questions

Why is India’s tyre industry seeking expanded duty relief?
India’s tyre industry is requesting broader customs duty relief due to rising raw material costs and persistent global supply chain disruptions affecting production stability. The sector relies heavily on crude-linked inputs, which have become more expensive and volatile. Existing duty exemptions cover only a limited range of materials, leaving key inputs still subject to high import duties. Expanding relief would help manufacturers manage costs, maintain output levels, and ensure consistent supply across critical sectors like logistics and agriculture.

What impact could raw material shortages have on the tyre industry?
Raw material shortages can significantly disrupt tyre manufacturing by affecting production timelines, increasing costs, and limiting availability in the market. Essential components like bead wire are critical for tyre safety, and any supply constraints can halt assembly lines. These disruptions can ripple across industries dependent on tyres, including transportation and farming. In severe cases, shortages could lead to higher prices, delayed deliveries, and reduced operational efficiency across supply chains.