India’s tyre industry is poised for a steady revenue increase of 7-8% during FY26, largely driven by robust replacement demand, which accounts for nearly half of the sector’s total annual sales. While orders from original equipment manufacturers (OEMs) are expected to remain on the lower side, an upward shift toward premium products could slightly lift revenue per unit sold, according to recent market analysis.
Despite moderate top-line growth, the industry’s operating profitability is forecast to stay stable at around 13-13.5%, supported by controlled input costs and healthy capacity utilization rates. Lean balance sheets, strong cash flows, and cautious capital expenditure will help the sector maintain a stable credit outlook in the coming year.
The projection is based on data from India’s top six tyre companies, which together represent 85% of the market share, generating combined revenues of around $11.61 billion. These manufacturers cater to a broad range of vehicle segments, including passenger cars, two-wheelers, trucks, and buses.
Domestic demand remains the primary growth driver, contributing approximately 75% of overall volume, while exports account for the remaining share. However, the tyre export segment faces significant hurdles. Rising global trade tensions, especially between the US and China, could lead to a spillover of cheap Chinese tyres into sensitive markets like India.
The United States, which imported 17% of India’s tyre exports last fiscal year, has introduced reciprocal tariffs on several Indian goods. These additional costs may reduce Indian tyres’ price competitiveness in the American market. Simultaneously, high US tariffs on Chinese tyres could result in excess supply from China, prompting manufacturers to offload surplus stock in price-conscious regions such as India.
To counter this, India has enforced anti-dumping and countervailing duties, including a 17.57% levy on large truck and bus tyres from China. However, industry experts warn that if similar protections aren’t extended to other tyre segments, an influx of low-cost imports could pressure domestic prices and squeeze margins.
The overall outlook for the Indian tyre sector remains cautiously optimistic, balancing growth prospects with vigilance against external trade risks.
