Tire industry to see this financial year with a revenue growth of 7-8% on replacement question: report

Crisil Ratings Report predicts a revenue growth of 7-8% in the domestic tire industry, which quotes challenges under referral of trade tensions and dumping risks. | Photocredit: Sivakumar PV

The domestic tire industry is expected to witness the turnover growth of 7-8 percent This tax year, driven by the replacement demand that accounts for half of the annual turnover, according to a report from Crisil ratings.

The segment is expected to post growth, even if a decrease by original equipment (OEMs) manufacturers will probably be modest, according to the report.

It also noted that rising premiumization is expected to give a slight lead to realizations.

However, escalating trade tensions and the risk of dumping by Chinese producers who distract supplies due to American rates can result in challenges, according to the report.

The operational profitability is likely to remain stable with 13-13.5 percent, supported by stable input costs and the use of healthy capacity, it said.

This, together with strong structure, lean balance sheets and calibrated capital expenditures, should help support the stable credit prospects of the sector, according to the report.

“Our analysis of the six best tire makers of India, aimed at all vehicle segments and good for 85 percent of £ 1 Lakh Crore from the sector, indicates the same amount,” said it.

The domestic demand remains the main pillar and pushes 75 percent of the total volume with exports that the rest of the rest added.

However, the export momentum comes with risks, the report noted.

The US, good for 17 percent of the Indian tire export volume last tax year, and 4-5 percent of the total industrial volume, has imposed mutual rates on various Indian goods, which may have been taking competitive capacity of the prize, it said it.

And steep American rates limit China access to that market, which increases the risk that surplus offer will be diverted to price -sensitive markets such as India, it added.

To curb cheap import, India imposes antidumping and counter vailing tasks, including a levy of 17.57 percent, on large truck and bus radials from China.

“However, a wider inflow of cheap tires into other segments can put pressure on domestic realizations without timely guarantees,” the report added.

Published on July 18, 2025