US Tariffs: Indian Tyre Industry Seeks Export Boost

On August 27, 2025, the Automotive Tyre Manufacturers’ Association (ATMA) raised the alarm: the US had slapped a 50% tariff on most tyre imports, and 25% on certain categories. It’s more than just numbers, it’s our most reliable export market suddenly shut tight.

Let’s pause and feel that: factories humming, workers clocking in, communities growing, and just when the engine feels traction, this curve appears.

Understanding the Real Pain Behind the Numbers

Numbers tell one story, but people live another. Here’s how it shakes out:

The US is India’s top tyre export destination, accounting for a significant 17% of global tyre shipments from India.
In FY24-25, India exported tyres worth over ₹25,000 crore, with more than ₹4,300 crore landing in American soil.
Indian manufacturers invested a whopping ₹28,000 crore in expanding capacity, greenfield, brownfield, hoping to tap growing global demand.

ATMA’s trepidation is completely human: “We’ve built this. We’ve made this happen. Please don’t let it slip away,” says every line of their plea.

What’s Being Asked, and Why It Matters

ATMA isn’t begging, it’s making precise, reasonable requests grounded in survival and fairness:

1. Boosting Export Incentives (RoDTEP)

Currently, tyre exporters get just 1.3% benefit under RoDTEP and 0.8% under Advance Authorisation. Under the older MEIS scheme, they used to enjoy 3%, and right now, that’s not enough to bridge the cost chasm.

The ask? Raise RoDTEP to 4%, and extend it universally, including under Advance Authorisation. Because sometimes, you need that extra speed to climb back up.

2. Raise the Duty Drawback Rate

Raw materials (like synthetic rubbers and chemicals) used in tyre-making attract 7.5% to 20% duties, but the current duty drawback stands at just 3.6%. ATMA says: “Make it 10%, so we can stay price-competitive”

3. Duty-Free Natural Rubber

India must import nearly 40% of its natural rubber due to domestic supply shortages. During cotton shortages, the government allowed duty-free cotton imports. ATMA asks for the same for natural rubber to plug the supply gap.

4. Support for R&D and Advanced Manufacturing

This isn’t just about short-term relief. India’s tyre industry wants to evolve, to innovate. They’ve asked for stronger incentives for R&D and adoption of advanced manufacturing technologies.

It’s Not Just About Tyres, It’s About People and Economy

Let’s zoom out a little.

This tariff isn’t limited to tyres. It’s a sweeping blow hitting labour-intensive sectors, textiles, gems, footwear, leather, all critical livelihoods. Soon after, Tyre makers, along with other exporters, realized the challenge:

India’s government is now drafting four relief schemes for exporters (like financial assistance, export promotion, and MSME aid) to cushion the 50% tariff blow, and Cabinet discussion is imminent.

This isn’t cold economics. It’s empathy:

Jobs hang on this, in factories, trucks, workshops, markets.
Investments could stall, new hires, expansion, innovation might slow.
The emotive thread, India’s burgeoning industrial identity, it all feels at risk.

Tyre factories don’t just make products, they sustain families, communities, and dreams. A tariff might feel like a political move to trade sprawl, but on the ground, it reverberates through streets, meadows, homes.

Can We Find a Way Forward?

Yes, and here’s how, with optimism and determination, India could smoothen the road ahead:

1. Fast-track Incentives

Increasing RoDTEP to 4% and raising drawback rates can immediately rebuild competitiveness. Right now, it’s not extra, it’s essential.

2. Power the Raw Material Lifeline

Allow duty-free natural rubber, so production remains viable and margins don’t crash.

3. Quick-Start Alternatives

Promote exports to other regions, LATAM, Africa, the EU. The government can support trade missions, e-commerce cards, logistics help, branding, and compliance via the Export Promotion Mission (EPM).

4. Strategic Dialogue

The USA might be stiff, but dialogue can soften. Meanwhile, diversifying trade partnerships strengthens resilience.

5. Innovate with Heart

Invest in R&D, sustainable materials, and next-gen manufacturing, even now, future-proofing matters.

Final Thoughts

Picture a tyre rolling smoothly on a winding road. It’s not just rubber and metal, it’s trust, craft, persistence. Now, suddenly, there’s a pothole, a jarring blow. The path becomes rough.

But this is India we’re talking about. Innovation meets empathy. Grit meets wisdom. Policymakers and businesses can act with urgency. With the right support, the tyre industry, like that rolling tyre, can regain its momentum and roll towards brighter horizons.

Let’s root for pragmatism, for thinking fast and acting with heart. Because behind every policy and press release, real lives, hopes, and futures hang. And that, keep that in mind, is what matters the most.