By finalizing new trade agreements with the European Union and the United States, Indian tires have received a “tariff preferential gift package”. Coupled with the domestic demand for car purchases and tire replacements that have surged year after year, the entire industry has ushered in a rare opportunity for development.
Just when the industry-wide expansion wave was in full swing, JK Tire launched a 3.5 billion expansion plan, which became a very representative landmark project in this round of collective investment; before and after, several major local leaders in India successively launched tens of billions of plant construction plans, and international big names such as Michelin and Bridgestone also increased investment and implementation.
The scale of the industry has been rising and the global ranking has been steadily advancing. However, problems such as dependence on imported raw materials and imperfect industrial chains cannot be avoided. With rapid expansion, can Indian tires rewrite the global tire industry pattern?
JK Tire’s tens of billions of production expansion: Indian tires have entered a golden period of concentrated production expansion
In May 2026, India’s JK Tire launched a US$530 million (approximately 3.584 billion yuan) expansion plan to upgrade the production capacity of its two major factories in Chennai and Vikrant, India. After the completion of the project, the overall radial tire production capacity will increase by 24%, which is a landmark project for the expansion of the Indian tire industry in 2026.
As a long-established local leader, JK Tire has an annual production capacity of 21 million units, with a capacity utilization rate of over 90%. The gap between domestic supply and demand continues to expand, coupled with the support of cash flow that surged 83% in the quarter, making expansion of production an inevitable choice for corporate development.
From 2025 to 2026, India’s leading tire companies have collectively launched a wave of production expansion, with the total planned investment in the industry exceeding RMB 16.2 billion.
The continuous implementation of production capacity has promoted the rapid improvement of the global status of the Indian tire industry. In the list of the top 75 global tires in 2025, 9 Indian companies are on the list. Four companies, MRF, Apollo, JK Tire, and CEAT, are among the top 20 in the world. The rankings of leading companies have generally improved by 3 to 6 places within ten years.
At present, India has 67 tire factories, ranking second in the world in number, and its industrial scale has successfully ranked first in the global tire echelon.
The pace of expansion of local tire companies in India is clear and the implementation is orderly: Apollo plans to spend 58 billion rupees (approximately 4.129 billion yuan) to expand production in the 2027-2029 fiscal year to increase the production capacity of passenger tires and truck and bus tires; MRF will launch a 53 billion rupee (approximately 3.773 billion yuan) new factory project in March 2026, specializing in the production of automobile tires and related auxiliary products.
BKT Tire will take the lead in launching a special investment of 13 billion Indian rupees in off-highway tires in 2024; in May 2025, it will further deploy 35 billion Indian rupees, focusing on promoting road tires, rubber tracks, carbon black and power plant expansion projects; in May 2026, the board of directors approved an additional 20 billion Indian rupees (approximately RMB 1.4 billion) investment in off-highway tire and road tire capacity expansion and infrastructure upgrade projects; TVS
Srichakra has finalized a 2.2 billion rupee (approximately 156 million yuan) production line technical upgrade, and the new production capacity will be implemented in batches from 2027 to 2029.
Multiple benefits resonate, the underlying logic behind the rapid rise of Indian tires
Indian tires can start a wave of large-scale factory construction, which is the result of the multiple dividends of domestic demand, foreign trade, and policies.
On the domestic demand side, India is firmly ranked as the third largest automobile market in the world. The popularity of SUVs and high-end motorcycles is accelerating. Replacement tires have become the basis of industry growth. The bumper harvest has brought increased freight activity, which continues to drive the demand for replacement of commercial vehicles.
At the same time, domestic automobile consumption continues to upgrade, and the market prefers large-size, high value-added radial tires. The average product price has steadily increased, directly increasing the company’s profitability. BKT’s gross profit margin can reach 50.2%.
Foreign trade policy dividends are the core driver of this round of industrial explosion. In early 2026, two blockbuster trade agreements were implemented to rewrite the export pattern: India and the European Union signed a free trade agreement in January. Tariffs on auto parts such as tires will gradually be reduced to zero in the next 5 to 10 years, and 90% of India’s exports will smoothly enter the EU market; in February, the so-called “reciprocal tariff” rate imposed by the United States on Indian goods will be reduced from 25% to 18%, and the entry threshold for the North American market will be significantly lowered.
On the other hand, Chinese tires have been subject to European and American anti-dumping policies all year round. Additional export tariffs are generally between 15% and 30%. Under cost pressure, a large number of mid-range overseas orders have begun to shift to India.
Cost and industrial policies are also the icing on the cake. India’s local land and labor costs are lower than those in Europe, America and China. Coupled with the implementation of domestic supporting supporting policies, many tire manufacturers have extended their layout to the upstream, such as BKT’s self-built carbon black factory and cogeneration power station, relying on self-sufficiency of raw materials to reduce production costs.
Coupled with the fact that Europe has been dragged down by high energy costs in recent years, many old tire factories have reduced production capacity, and the relocation of global production capacity has further freed up overseas market space for India.
Global giants are gathering together, and India has become a new hot spot for global tire manufacturing
Bright growth expectations continue to attract domestic and overseas capital to invest in the Indian tire track.
In 2024, Michelin invested US$67 million to upgrade its Chennai factory, focusing on high-end passenger tire production; Bridgestone invested US$85 million to renovate its Pune and Indore factories, focusing on high-end passenger car supporting tires; Continental Tire spent 1 billion rupees to expand the Modipuram factory, focusing on light truck and SUV tires; Yokohama Rubber finalized US$130 million to invest in a new industrial and mining OTR tire plant in Odisha, targeting the global demand for engineering tires.
The layout of foreign investment is very clear: relying on India’s low-cost advantage, it will not only provide supporting equipment to local car companies, but also use the dividends of free trade agreements to radiate overseas markets such as the European Union and the Middle East.
Indo-US joint venture brands such as Larson have taken a differentiated route, with tire manufacturing in India and warehousing and distribution anchored in the United States. They rely on 7-year warranty + three-time refurbishment services to deeply develop the North American fleet channel and realize the transnational split of production and sales.
Soft Control Co., Ltd., a leading domestic rubber machinery company, has returned to the Indian market after eight years. It has used the India Rubber Expo to restart local business cooperation, successively carried out equipment and technology docking with a number of local leading tire companies, and relied on the industry-wide plant construction boom in India to win equipment orders.
Prospects and hidden dangers coexist, and long-term expansion hides multiple constraints
The industry’s mid- to long-term development space is indeed worth looking forward to: an industry report issued by the Indian Tire Association and PricewaterhouseCoopers predicts that in 2047, India’s tire production is expected to quadruple the current level, with industry-wide revenue reaching 130 trillion Indian rupees.
Relying on the country’s demographic dividend and the continued implementation of infrastructure, the industry’s average annual growth rate is expected to maintain 7% – 9% in the next ten years. The incremental demand in emerging markets in Africa and Latin America can also continue to absorb new production capacity. The Indian Automotive Tire Manufacturers Association (ATMA) has set a development goal of tire exports exceeding 410 billion rupees (36 billion yuan) in 2030.
However, behind the rapid expansion, shortcomings are also prominent. The shortage of raw materials is the industry’s top problem. India’s natural rubber is highly dependent on overseas imports. Geographical conflicts in the Middle East have disturbed the prices of crude oil and synthetic rubber. The rising prices of raw materials continue to squeeze production profits. Many small and medium-sized brands of mid-range tires have fallen into losses.
Secondly, the local industrial chain is imperfect. High-end production equipment and special rubber additives still need to be imported. The high-endization of local brands mostly relies on overseas mergers and acquisitions. Apollo’s acquisition of Vredestein in the Netherlands and CEAT’s takeover of Michelin’s Camso business are typical cases. The shortcomings in independent research and development capabilities will be difficult to fill in the short term.
Coupled with the uncertainty of European and American trade policies, tariffs may be adjusted at any time. Once global demand drops, the massive production capacity that is currently being put into production will easily be overproduced, triggering a vicious price war.
Comparison of the tire industries between China and India brings inspiration to the development of the tire industry
From the perspective of hard data, according to official statistics from the General Administration of Customs and ATMA, China’s total rubber tire exports will reach 167.7 billion yuan in 2025, and India’s tire exports in the 2024-2025 fiscal year will be 2.93 billion US dollars (equivalent to 20.9 billion yuan). China’s tire export volume is about 8 times that of India.
Domestic tire production accounts for 40% of the world’s total. The entire industrial chain is mature. The self-sufficiency rate of synthetic rubber is 76.4%. The average export price of truck and bus tires is 15% – 20% lower than that of India. India’s advantages are concentrated in the fast-growing domestic demand market and the tariff dividends in Europe and the United States. The competitiveness of industrial and mining tires and agricultural tires is outstanding, but the overall production capacity is far less than that of China. The export market is highly bound to Europe and the United States, and the market structure is weak in risk resistance.
The industrial development paths of the two countries are obviously differentiated: India relies on tariff dividends to undertake the transfer of global mid-range production capacity, relies on the replacement market to expand scale, and deeply explores the mid-range cost-effectiveness track; domestic tire companies are forced by overseas trade barriers to accelerate the transformation of high-end products. Leading companies are increasing their research and development of new energy tires and high-performance tires, while building factories in Vietnam and Thailand to avoid tariffs, and embarking on a dual-line development model of “local high-end + overseas localization”.
Comparing the development history of India’s industry, the domestic tire industry can also gain a lot of development inspiration.
On the one hand, we will continue to consolidate the inherent advantages of the entire industry chain, deeply explore the high-end tracks of new energy and special engineering tires, and rely on technology premiums to escape from low-price involution; on the other hand, we will continue to explore diversified overseas markets such as the Middle East and Latin America, and reduce our dependence on the single market of Europe and the United States. At the same time, we will learn from India’s deep cultivation strategy of subdivision categories, focus on the niche tire track to build single product competitiveness, and use differentiated products to hedge against the impact of India’s mid-range production capacity.
Epilogue
Back to the opening question: Can Indian tires rewrite the global tire industry pattern?
The answer is local optimization and it is difficult to shake the market.
Relying on tariff dividends and local domestic demand, India will steadily seize orders for mid-range tires from Europe and the United States, and increase its voice in the agricultural and engineering special tire segments. However, due to its dependence on external raw materials, shortcomings in the industrial chain, and weak self-research, it is difficult for India to achieve an overall counterattack.
Global tires are originally a diverse market where international giants, Japanese and Korean brands, and Southeast Asian producers coexist. China relies on the entire industry chain and global production capacity to firmly occupy the backbone of the industry. In the future, India will more complement the global mid-range supply, forming a layered competition pattern in which foreign capital controls the high-end, China develops all categories in depth, India deeply cultivates the mid-range segment, and Southeast Asia relies on raw materials to provide low-cost OEM.
