India Tyre Market Outlook 2028

India Tyre Market Overview

The India tyre market is currently valued at USD 196.3 million, based on a comprehensive five-year historical analysis. This growth is primarily driven by the increasing demand for vehicles in the country, particularly with the rise in sales of commercial and passenger vehicles. The replacement tyre market also plays a significant role due to the higher frequency of tyre replacements, especially in commercial fleets. Government initiatives such as incentives for local manufacturing and the implementation of various infrastructure projects further boost market growth, creating sustained demand for both new and replacement tyres.

In terms of dominance, cities such as Mumbai, Delhi, and Chennai play crucial roles due to their high concentration of automotive manufacturers and suppliers. These cities are home to many original equipment manufacturers (OEMs) and leading automotive industries that drive tyre demand. Additionally, Indias Southern region dominates due to its developed infrastructure for tyre production, hosting key players such as MRF and Apollo Tyres. These cities serve as both manufacturing hubs and significant consumption centers, facilitating strong logistics and distribution networks.

The Indian government introduced the Production Linked Incentive (PLI) scheme to boost domestic manufacturing in the automotive and auto components sector. With an allocation of INR 26,000 crore, the scheme aims to enhance local manufacturing capacity and attract global investments. Tyre manufacturers benefit from this incentive, as it encourages the production of advanced automotive components, including tyres for electric vehicles and fuel-efficient vehicles. This initiative not only reduces import dependency but also supports the domestic tyre industry by boosting production efficiency.

India Tyre Market Segmentation

By Tyre Type: Indias tyre market is segmented by tyre type into Radial Tyres and Bias Tyres. Radial tyres dominate the market share under this segmentation due to their superior performance in terms of fuel efficiency, durability, and better traction. Radial tyres have been gaining popularity, especially in passenger vehicles, owing to their longevity and ability to withstand harsh road conditions. This segment has also seen rising demand from commercial vehicles, where long-haul operators prefer radial tyres for their cost-effectiveness and reduced downtime due to fewer replacements.

By Vehicle Type: Indias tyre market is also segmented by vehicle type into Passenger Vehicles, Commercial Vehicles, Two-Wheelers, and Off-the-Road (OTR) Vehicles. The Passenger Vehicles segment holds the dominant market share owing to the rapid urbanization, increasing disposable income, and growth in vehicle ownership among middle-class consumers. Additionally, the rise in automotive financing options has further fueled the demand for passenger vehicles, which directly correlates with tyre sales. The growth in the demand for electric and hybrid passenger vehicles is also pushing the demand for high-performance tyres.

India Tyre Market Competitive Landscape

The India tyre market is dominated by a few key players who hold significant market shares and have strong brand recognition. Companies such as MRF Ltd., Apollo Tyres Ltd., and CEAT Ltd. are prominent, with these firms benefitting from their established manufacturing capabilities and extensive distribution networks. These players have a competitive advantage due to their local production facilities, which help them meet the growing demand efficiently. Additionally, these companies invest heavily in research and development to introduce innovations such as fuel-efficient and eco-friendly tyres.

Company Name

Establishment Year

Headquarters

R&D Expenditure

Production Capacity

Geographical Presence

Revenue

Number of Employees

MRF Ltd.

1946

Chennai, India-----

Apollo Tyres Ltd.

1972

Gurugram, India-----

CEAT Ltd.

1958

Mumbai, India-----

JK Tyre & Industries Ltd.

1951

New Delhi, India-----

Bridgestone India Pvt. Ltd.

1931

Tokyo, Japan-----

India Tyre Market Analysis

Market Growth Drivers

Increasing Automotive Sales (Passenger Vehicles, Commercial Vehicles, Two-Wheelers): Indias automotive sector has been witnessing steady growth in recent years, driven by increasing demand for passenger vehicles, commercial vehicles, and two-wheelers. In 2023, India saw the production of over 25 million vehicles, including both passenger and commercial categories, reflecting a strong recovery post-pandemic. This increase in vehicle production and sales has directly influenced tyre demand. The automotive industry plays a crucial role in Indias economy, and the continuous rise in vehicle ownership and production is expected to sustain the demand for both original equipment and replacement tyres.

Expanding Infrastructure Development (Impact on Commercial Tyre Demand): Indias infrastructure development initiatives, including major highway projects, road construction, and expansion of logistics networks, have led to a rising demand for commercial tyres. As of 2023, Indias National Infrastructure Pipeline allocated INR 111 lakh crore for infrastructure development, with a significant portion directed toward transport and logistics. This rapid expansion is expected to increase commercial vehicle use and, by extension, drive demand for heavy-duty tyres. The growing need for efficient transportation infrastructure continues to boost the commercial tyre market in India, supporting fleet operators and logistics companies.

Government Incentives for Manufacturing (PLI Schemes, FDI Policies): The Indian governments Production Linked Incentive (PLI) schemes, introduced to boost domestic manufacturing, have benefited the automotive and tyre sectors significantly. Under the PLI scheme for the automotive sector, the government allocated INR 26,000 crore to encourage local production and attract foreign direct investments. In addition, the FDI inflow into Indias automotive sector stood at USD 33.77 billion from April 2000 to March 2023. These initiatives have incentivized tyre manufacturers to expand their domestic production capabilities.

Market Challenges
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Volatile Raw Material Prices (Rubber, Steel): The tyre manufacturing industry in India faces significant challenges due to the volatility in raw material prices, particularly rubber and steel. India, one of the largest producers of natural rubber, still relies on imports to meet the growing demand. In 2023, India imported nearly 500,000 tonnes of natural rubber, and fluctuations in global rubber prices have impacted production costs. Additionally, the rising cost of steel, a key component in tyre reinforcement, has further squeezed profit margins for tyre manufacturers.

Stringent Environmental Regulations (Carbon Emission Norms): Environmental regulations regarding carbon emissions and waste management have put pressure on tyre manufacturers in India. The Indian governments focus on reducing carbon footprints in industrial sectors, including manufacturing, has led to stricter norms for tyre production. In 2023, Indias emissions reduction commitments under the Paris Agreement have also influenced the tyre industry, particularly regarding the carbon output during the manufacturing process and waste tyre recycling. Compliance with these norms adds to the operational costs for tyre companies.

India Tyre Market Future Outlook

The India tyre market is set to experience robust growth over the next five years, driven by continuous advancements in automotive technology, an increase in vehicle ownership, and the growth of the electric vehicle market. Government support in terms of infrastructure development and favorable policies aimed at boosting domestic manufacturing will also fuel the market. The rise in consumer preference for fuel-efficient and eco-friendly tyres, along with technological innovations in tyre production, will create further opportunities for market expansion. Additionally, the growing focus on sustainable tyre solutions, including recyclable and green tyres, will push the industry towards environmentally conscious practices.

Market Opportunities
:

Increasing Focus on Sustainable Tyre Solutions (Recyclable, Eco-friendly Materials): Sustainability is becoming a central focus for tyre manufacturers in India. In 2023, Indias tyre industry saw a rise in the use of recyclable and eco-friendly materials, such as biodegradable rubber compounds and silica-based solutions. This trend aligns with the countrys commitment to reducing its carbon footprint, with several government initiatives encouraging the use of sustainable materials in manufacturing. Tyre manufacturers are also investing in advanced recycling technologies to convert used tyres into reusable products, opening up new avenues for revenue generation.

Growing Export Opportunities (Key Export Destinations): Indias tyre industry is poised to benefit from growing export opportunities, especially to markets in Africa, Europe, and the Middle East. In 2022, India exported tyres worth USD 2 billion, and this figure is expected to rise due to the increasing demand for affordable, high-quality tyres from Indian manufacturers. The Free Trade Agreements (FTAs) signed with key trading partners further enhance export opportunities. The governments support through export incentives and favorable trade policies continues to strengthen Indias position as a global tyre exporter.
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