Trade barriers push manufacturers to rewire export routes and production blueprints.
09 Aug 2025 | 10115 Views | By Shahkar Abidi
India's leading tyre manufacturers are navigating a turbulent global trade landscape, with mounting US tariffs forcing them to recalibrate their export strategies and manufacturing footprints. While the domestic market remains a robust anchor, companies like JK Tyre , CEAT and Apollo Tyres are deftly shifting volumes and assessing long-term investments ...
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India's leading tyre manufacturers are navigating a turbulent global trade landscape, with mounting US tariffs forcing them to recalibrate their export strategies and manufacturing footprints. While the domestic market remains a robust anchor, companies like JK Tyre , CEAT and Apollo Tyres are deftly shifting volumes and assessing long-term investments to mitigate the impact of rising protectionism, particularly from the critical North American market.
The development comes even as the POTUS Donald Trump this week added another 25% punitive levy on Indian imports, over its trade with Russia.. This takes the total tariff to 50% on Indian imports by the US, which makes it among the highest in the world.
The move, as per industry stakeholders, is expected to affect Indian exports of auto components and tyres, especially to the US, which accounts for 27% of India's auto component exports and 17% of its tyre exports.
For JK Tyre, the immediate concern is the 50% US tariff on Indian tyre imports. However, the company is already in motion to minimize disruption. "That out of our total turnover in the US is only about 3% of our export from India that we are fully lined up to allocate that volume to other countries," stated Anshuman Singhania, MD of JK Tyres during a post result conference call.
These re-allocations are targeting established markets such as Mexico, Latin America, Brazil, UAE, parts of Europe, and Africa. Crucially, JK Tyre is leveraging its Mexico plant, which currently benefits from a zero-tariff window to the US, extended to 90 days. This provides a vital conduit to serve the US market, with Mexico exports to the US already representing a high single digit business for the company.
Singhania emphasized that the impact overall is not going to be significant from the US tariffs on Indian exports. Beyond the US, Europe and UK remain strong export markets for JK Tyre, with zero tariffs in the EU and a high single digit market share in the UK for TBR (Truck and Bus Radial) tyres.
CEAT, while acknowledging the geopolitical tensions and potential spillover from US tariff uncertainty that could hinder consumer sentiment across the globe, currently has limited direct exposure to the US market from India. Arnab Banerjee, MD and CEO of CEAT Ltd during post result confrence call noted, "Our stake in the US market is still very low. So the impact of tariff uncertainties were not very significant" "However, it is our future growth market and therefore, we look forward to the situation".
The company is also grappling with tariffs related to its recent acquisition of Camso in Sri Lanka, which faces a 30% reciprocal US tariff on tyre exports, down from an initial 44%. Discussions are ongoing to potentially reduce this further. CEAT's strategy in this context involves examining its production mix.
"If it stays at 30%, for example, then as I mentioned in the earlier call, we are working on a plan of where to produce what for which market," Banerjee explained, adding, "We also have two bias factories in India, and we are inheriting bias factory in Sri Lanka.
So there is a possibility of rejigging the mix to see where to produce what. That is a backup plan". Despite the tariff, CEAT believes that if the 30% rate holds, there is no incremental competitive disadvantage as far as Camso will face compared to other countries like China, Canada, and Vietnam. "However, the US customer will experience an overall inflation. So there could be some impact on demand because of that" he added. CEAT also noted headwinds in several geographies for its international business, resulting in flat sales.
In layman's language, Bias tyres are generally made with layers of rubber-coated fabric cords which are positioned diagonally to the direction of travel. It is primarily used in construction, agriculture or utility vehicles where toughness takes the front seat over ride comfort.
Favoured for environments where toughness is prioritized over ride comfort—like construction, agriculture, or utility vehicles
Likewise, Apollo Tyres, another major tyre manufacturer, is managing the financial impact of US tariffs primarily by leveraging its relatively low exposure to the American market (about 3-5%) , strategic cost discipline, and supply chain adaptation.
To make matters worse for Apollo Tyres, the inflationary pressures in Europe, specifically higher energy and salary prices over the last couple of years, significantly impacted operations.
Apollo Tyres, for example, during its recent confrence call with analyst cited these as reasons for its intended decision to close production and production related activities at its high-cost Netherlands plant by summer 2026, necessitating an exceptional item provision of approximately Rs 3.7 billion (Rs 370 crore). While similar inflationary pressures were noted in Hungary, its lower tax rate in the high single digits provided some offset compared to the Netherlands' approximately 20% tax rate.
Apollo Tyres closed Q1 FY26 with a consolidated topline growth of nearly 3.6% year-on-year and an EBITDA margin of 13.2%. JK Tyre achieved its "highest revenue" at the India level, with an overall sales growth of 11% year-on-year and a consolidated operating profit (EBITDA) margin of 10.9%. CEAT reported a consolidated 10.5% year-on-year growth, and a consolidated EBITDA margin of 10.9%, though it saw a 56 basis points quarter-on-quarter and 122 basis points year-on-year contraction in margins due to lower realization and mix changes.
India's tyre industry which is looking for 6-8% growth in FY2026, driven primarily by replacement demand in the domestic market, according to ICRA's recent industry assessment. The projection comes as the sector navigates headwinds from US tariffs affecting export markets and elevated natural rubber prices constraining margin recovery.
Industry revenues grew 3% sequentially in the fourth quarter of FY2025, representing an 8% year-on-year increase. Replacement demand and export volumes supported this growth, while original equipment demand lagged. ICRA forecasts 7-9% revenue growth for major tyre manufacturers in FY2026, driven by domestic volumes and improved product mix. The export segment faces challenges from US import tariffs, with inflation and competitiveness emerging as key risk factors for Indian manufacturers.