US Tariff Hike Will Hurt Indian Tyre Makers' Ability To Sustain Export Growth: ATMA

(MENAFN- KNN India) New Delhi, Aug 29 (KNN) The Automotive Tyre Manufacturers' Association (ATMA) on Thursday warned that the steep US tariff hike will significantly constrain Indian tyre makers' ability to sustain the strong export momentum built over recent years, urging immediate policy support to mitigate the impact.

Tyre exports from India to the US, its largest overseas market, now face a 50 percent tariff on most categories and 25 percent on specific categories.

Competing economies such as China, Thailand, Vietnam, Cambodia and Indonesia continue to attract much lower tariffs, placing Indian manufacturers at a 'distinct strategic disadvantage', ATMA said.

“The hike in US tariffs will severely constrain the ability of Indian manufacturers to sustain export momentum, particularly since the US is our largest export destination,” ATMA Chairman Arun Mammen said.

He noted that the industry has invested more than Rs 28,000 crore in recent years to expand both greenfield and brownfield capacities.

The US accounts for 17 percent of India's tyre exports, valued at over Rs 4,300 crore in FY 2024-25, out of total tyre exports of more than Rs 25,000 crore. Indian tyres are exported to over 170 countries.

ATMA also highlighted structural challenges faced by the sector, including limited domestic availability of natural rubber, which forces the industry to import nearly 40 percent of its requirement.

The body has urged the government to permit duty-free imports equivalent to the demand-supply gap.

In addition, the industry association called for enhanced incentives for research and development and advanced manufacturing, as well as an increase in export incentives under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.

ATMA argued that current RoDTEP rates-1.3 percent and 0.8 percent under Advance Authorisation-are significantly lower than the actual incidence of taxes, compared with 3 percent under the earlier MEIS scheme.

It has requested that benefits be raised to 4 percent and extended to tyre exports under Advance Authorisation. Mammen added that while the industry has the resilience to explore new markets, building alternative export destinations is a long-term process.

“Immediate policy support will be critical to ensure India does not lose ground in a highly competitive global market,” he said.

(KNN Bureau)

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