Increase R&D In Tyre Manufacturing, Diversify Into Non-US Markets To Counter US Tariffs: Report

2025-09-03 08:30:23

(MENAFN- IANS) New Delhi, Sep 3 (IANS) India's tyre industry should lower raw material dependence by investing in R&D and accelerate expansion into non-US markets to counter US tariffs, a report said on Wednesday.

While the sector has built strong global scale and competitiveness, the recent escalation of US tariffs poses a significant headwind, a report from CareEdge Ratings said.

The US administration has doubled tariffs on Indian imports from August 27 with new tariffs set at 50 per cent for most categories and 25 per cent for specified goods.

To remain competitive, players will need to balance market diversification with cost optimisation, supported by timely policy interventions.

"Timely policy interventions such as strengthening export incentives, enabling enhanced R&D support, and advancing manufacturing capabilities are critical to safeguard India's global market position and ensure long-term competitiveness,” said Sahil Goyal, Assistant Director CareEdge Ratings.

The US is the largest market for Indian tyres, accounting for 18 per cent of shipments, according to CareEdge Ratings. Unlike India, several Asian peers, such as Japan, Vietnam, and Indonesia face lower duty access, thus eroding India's relative cost competitiveness in a key export market.

The ratings agency pointed out that in the near term, tyre manufacturers with a high export exposure to the US will feel the sharpest impact of the new tariffs.

US President Donald Trump on September 3 reiterated his complaints against India's trade practices, calling the India-US relationship“one-sided for many years” and pointing to high tariffs as a barrier to American exports.

He once again pressed his allegation that India's tariffs on US exports are“about the highest in the world.

According to the World Trade Organisation (WTO) and World Bank data, India does not have the highest tariffs in the world. However, it imposes high levies in specific sectors such as agriculture to protect its farmers.

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