In the first half of the year, tyre exports were severely impacted and declined by 11% in view of slowdown in advanced economies, geopolitical uncertainties and inflationary pressures.
12 Jun 2024 | 2013 Views | By Autocar Professional Bureau
Tyre exports from India made a sharp recovery in the second half of FY2023-24 and went up by 12% in value terms against the year-ago period, reveals the data recently released by the Ministry of Commerce, Government of India.
In the first half of the year, tyre exports were ...
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Tyre exports from India made a sharp recovery in the second half of FY2023-24 and went up by 12% in value terms against the year-ago period, reveals the data recently released by the Ministry of Commerce, Government of India.
In the first half of the year, tyre exports were severely impacted and declined by 11% in view of slowdown in advanced economies, geopolitical uncertainties and inflationary pressures. The total tyre exports from India during FY2023-24 stood at Rs 23073 crore matching the previous year’s figure of Rs 23125 crore.
“The resurgence witnessed in tyre exports in the second half of the year despite a tough external environment is a testament to the resilience of the Indian Tyre Industry to ride through challenging times and carve a niche for itself. It also points to the compelling value proposition offered by Indian tyre manufacturers on quality which is being appreciated globally”, said Arnab Banerjee, Chairman, Automotive Tyre Manufacturers’ Association (ATMA).
With a turnover of approximately Rs 90,000 crore and exports of over Rs 23,000 crore, the Indian Tyre Industry is one of the few manufacturing sectors having a high export to turnover ratio. Currently Indian tyres are being exported to over 170 countries in the world. Innovations such as eco-friendly and fuel efficient tyres have particularly resonated with global consumers.
Tyre exports have nearly doubled in the last 4 years (FY20-FY24) despite a slew of domestic and external challenges. From Rs 12,844 crore in FY20, tyre exports reached Rs 23,073 crore in FY24.
Indian manufactured tyres are being well accepted across advanced markets such as the US and EU countries. The US continues to be the largest market for Indian tyres accounting for 18% of total tyre exports from India in FY24. Top 5 export markets for Indian manufactured tyres in FY24 included US, Germany, Brazil, France, Netherlands and Italy and UAE.
Improvement in economic activity worldwide, offers a unique opportunity for Indian tyre manufacturers. The Tyre Industry has the potential of significantly increasing exports from India in the next 3-4 years and reinforce India’s position as a key player in the global tyre market if certain roadblocks, especially with regard to accessing Natural Rubber (NR) are removed. Tyre industry needs to adhere to pre import condition for NR import against (tyre) export obligation. This makes the operations very constrictive and affects export performance.
The export obligation period needs to be restored to 18 months. The export obligation period (for tyres) was reduced from 18 to 6 months a while ago making it tough for the industry to access a raw material which is in short supply domestically.
According to ATMA, these restrictions have not benefitted the growers / NR producing interests but have had an adverse fallout on NR consuming interests, both tyre and non-tyre sectors, especially by way of inhibiting export of rubber goods from India.
On the other hand, growth in exports will benefit the entire Rubber value chain including rubber growers as Tyre Industry accounts for over 70% of NR consumption in the country.
On its part, Indian Tyre Industry has invested an estimated Rs 23,000 crore in greenfield and brownfield capacities in the last 3-4 years and is ahead of the demand curve in meeting both domestic and export demand). Tyre requirements of OEMs across the board, including Tyres for EVs, are being fully met by the Indian Tyre Industry.