The India Tire Market is experiencing robust growth of 8.71% CAGR during the forecast period 2023–2030 and is projected to reach USD 25.50 billion by FY2031 from USD 13.11 billion in FY2023 mainly owing to the rapidly growing automotive industry in the country. Tires plays a crucial role in ensuring vehicle safety and performance, making them an essential component of the automotive ecosystem. In recent years, the market has witnessed several key drivers that have propelled its growth. With the rising disposable income and growing middle-class population, there has has been a surge in demand for passenger and commercial vehicles. This has directly translated into increased demand for tires. Additionally, government initiatives such as “Make in India” and the push for electric vehicles have further contributed to the market's growth.
Another important driver is the focus on road infrastructure development. The Indian government has been investing heavily in building new roads and highways for better connectivity, which has led to an increase in vehicle sales and subsequently boosted the demand for tires. The better infrastructure of roads has positively impacted the market for luxury cars in India. More than 16,000 luxury vehicles were sold in India in the first six months of the year 2022, a 55% increase from that of 2021. In March 2023, JK Tires and Industries launched a premium tire brand “Levitas Ultra” in order to meet the growing requirements of the ever-growing demand for luxury cars.
Increase in Demand for OTR Tire
India has witnessed an increase in demand for Off-The-Road (OTR) tires in recent years. Several factors are included in this growing demand. Firstly, there has been significant infrastructure development in the country, including the construction of roads, highways, and airports. These projects require heavy machinery and vehicles that rely on OTR tires for optimal performance in challenging terrains.
Secondly, the mining and construction sectors in India have experienced substantial growth. OTR tires are essential for heavy-duty vehicles used in mining operations, earthmoving equipment, and construction projects. Moreover, the agriculture sector, which heavily relies on tractors and other agricultural machinery , has also contributed to the demand for OTR tires. The expansion of mechanized farming practices and the need for increased productivity have driven the demand for reliable and durable OTR tires. Overall, the increase in infrastructure development, growth in the mining and construction sectors, and mechanization of agriculture have all fueled the demand for OTR tires in the India tire market. Manufacturers have responded by expanding their OTR tire offerings to meet the specific requirements of these sectors.
For example, BKT tires is creating India-centric products, whether for the mining sector's Mineforce or the agriculture sector's Commander series, or the soon-to-be-launched addition to the Earthmax series. The company has over 1100 SKUs devoted towards the Indian markets.
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Moving Towards to Green Approach in Tire Manufacturing
In recent years, the India Tire Market has been witnessing a shift towards a greener approach in tire manufacturing. Several key players in the industry are actively adopting sustainable practices to reduce their environmental footprint. This includes the development and production of eco-friendly tires that promote fuel efficiency and reduce carbon emissions. Manufacturers are increasingly focusing on incorporating sustainable materials, such as bio-based and recycled materials, in tire production. They are also investing in research and development to improve tire design and tread patterns, resulting in reduced rolling resistance and improved fuel efficiency.
Furthermore, tire manufacturers are implementing energy-efficient manufacturing processes and adopting measures to reduce waste generation and enhance recycling and disposal practices. Government initiatives promoting sustainability and environmental conservation are also driving this green approach in the India Tire Market. With increasing consumer awareness and demand for eco-friendly products, tire manufacturers are embracing sustainable practices to meet the evolving market needs and contribute to a greener future.
For instance, CEAT, one of the prominent tire manufacturers in India, introduced the CEAT Fuelsmarrt range of tires in 2022. These tires are designed to promote fuel efficiency and reduce carbon emissions. The Fuelsmarrt range utilizes innovative tread compounds and advanced tread patterns to minimize rolling resistance, resulting in improved mileage and lower fuel consumption.
Medium and Heavy Commercial Vehicle to lead the segment
Medium and Heavy Commercial Vehicles (MHCVs) are expected to lead the segment for the India tire market due to an increasing demand for logistics and transportation services, driven by e-commerce, infrastructure development, and growing industrial activities. Vehicles such as buses and trucks require robust and durable tires to handle heavy loads and endure long-distance travel. Key players in the market are focusing on developing tires specifically designed for MHCVs, with enhanced load-carrying capacity, improved fuel efficiency, and superior traction. The continuous growth in the MHCV segment, along with the need for tire replacements and upgrades, is projected to drive the demand for tires in this category.
For example, Apollo Tires introduced the Apollo EnduRace RD HD tire range in 2022, specifically designed for MHCVs. These tires are built to handle heavy loads and provide excellent durability and performance on long-haul routes. The EnduRace RD HD tires feature a robust construction , advanced tread pattern, and reinforced sidewalls for enhanced load-carrying capacity, fuel efficiency, and overall reliability.
Government Regulations
The Indian government has used import duties as a tool to protect domestic industries, promote domestic manufacturing, and address trade imbalances. By imposing import duties on tires in 2020, the government encouraged domestic production and reduce dependence on imported goods. Due to these import duties regulations, major market players are now forced to produce tires in the country instead of relying on import. Apart from this, government of India have been introducing fuel efficiency standards in vehicles, which has influenced market players to innovate and provide fuel-efficient tires for OEM players.
Automotive Tire Manufacturers' Association (ATMA) in India represents and advocates the interests of tire manufacturers in the country. While ATMA does not have regulatory authority, it works closely with the government to address industry challenges and promotes a favorable regulatory environment. ATMA actively engages in discussions with policymakers on issues related to taxation, import/export regulations, standards, and other industry-specific regulations. The association also collaborates with government agencies to enhance road safety, promote sustainable manufacturing practices, and ensure compliance with quality standards. ATMA acts as a platform for its members to voice their concerns, provide industry insights, and work towards the growth and development of the Indian tire market while adhering to relevant government regulations.
For example, The export business currently accounts for roughly 20% of the Indian tire industry's total sales; by 2030, this percentage is anticipated to increase to 30%. The tire business is in line with India's expected significant growth in the coming decade.
Impact of COVID-19
The COVID-19 pandemic had a significant impact on the India tire market. During the lockdowns and restrictions imposed to contain the spread of the virus, vehicle production and sales were severely disrupted, leading to a decline in demand for tires. The closure of manufacturing facilities and disruptions in the chain supply also affected tyre production and distribution. additionally, the economic slowdown and reduced consumer spending resulted in a slowdown in replacement tyre demand. However, as restrictions eased and economic activities resumed, the market gradually recovered. The shift towards personal mobility and increased demand for commercial vehicles for logistics and e-commerce has helped in the revival of the India tire market.
Impact of Russia-Ukraine War on India Tire Market
The Russia-Ukraine war has indirect implications for the India tire market. The conflict has led to global supply chain disruptions, affecting the availability of raw materials and components used in the production of tires. Price fluctuations in commodities like rubber and crude oil, which are crucial for tire manufacturing, can impact production costs and subsequently influence tire prices in the Indian market. Additionally, any escalation in the war could have wider consequences on global trade and economic stability, which may indirectly affect the overall demand and growth prospects of the India tire market.
Report Scope
“India Tire Market Assessment, Opportunities, and Forecast, FY2017-FY2031”, is a comprehensive report by Markets and Data, providing in-depth analysis and assessment of the current scenario of the tire market in India, industry dynamics and opportunities, and forecasts (FY2024-FY2031). Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.
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