Tyre demand positive after GST cut, says MRF V-C & MD Arun Mammen

MRF vice-chairman Arun Mammen on GST-led demand revival, natural rubber challenges, EV-driven tyre innovation and how currency swings are reshaping the tyre industry

Chennai-based MRF, one of the largest tyre manufacturers in India, is among the most expensive stocks in the country. Company vice-chairman and managing director Arun Mammen, in an interview with Shine Jacob in Chennai, talks about the impact of goods and services tax (GST) reforms on tyre demand, along with the electric vehicle (EV) revolution, among other issues. Edited excerpts: 

You took charge as new chairman of the Automotive Tyre Manufacturers' Association (ATMA). From the industry point of view, how do you see demand for natural rubber, and ATMA's dream plantation project? 

Overall, the demand in the tyre industry is very positive after the GST reduction. We are seeing a good uptick in the demand for tyres. This has translated into a significant rise in the demand for natural rubber too. Four tyre companies (Apollo, CEAT, JK Tyre, and MRF), in collaboration with the Rubber Board of India, have put up investments in rubber plantations in the Northeast. This is part of Project Indian Natural Rubber Operations for Assisted Development (INROAD). As part of the project, around 200,000 hectares of rubber plantations in the Northeast are being undertaken under the mentoring of the Ministry of Commerce and Industry. So far, 170,000 hectares have been cultivated. Another 30,000 hectares will be completed by the middle of next year. That will be another 200,000 hectares coming into the market. The plantation will happen, but by the time tapping starts, it could take another five to seven years.

 

While tyres can be imported at concessional or zero-duty rates under various free trade agreements (FTAs), raw material natural rubber attracts a basic Customs duty of 25 per cent. Is this inverted duty structure one major challenge for you on natural rubber? Also, how are you seeing the GST revision impact?

 

Yes, there is an inverted duty structure. This has been taken up. The government has done remarkably well by reducing the GST rates. Because of that, tyre prices have come down. Especially on products like tractors, GST has now come down from 18 per cent to 5 per cent, giving a huge boost to the entire farm segment, including tractors and tyres. In fact, in every vehicle category, there has been a reduction in GST rates, which is evident in the sales of new vehicles.

 

MRF is the largest supplier to the EV industry as well. What is the transition that the tyre industry is seeing as India is witnessing an EV revolution?

 

When you look at EV versus internal combustion engine (ICE) vehicles, the ICE segment is much larger of the two in terms of network, distribution, and acceptance. From the tyre industry perspective, we have to see that the tyre adapts to electric vehicles. This is because the weight of an EV is more than that of an ICE vehicle. The second important factor is that the torque of an EV is significantly higher than that of an ICE vehicle. There is a lot more friction and wear and tear of the tyre in an EV. Probably, the wear and tear of a tyre, depending on the vehicle power, can be as high as 15 per cent more than that of an ICE vehicle. We have to look into technology that helps in making the tyre more durable and, at the same time, improves the performance of the vehicle.

 

Raw material prices were a concern for you during the last quarter. How is it evolving this quarter?

 

Today, though international crude prices are stable, hovering around $60 a barrel, the depreciation of the rupee is to be seen. The rupee, as you know, has dropped (in July 2025 it was ₹85; in December 2025 it touched ₹91). For the tyre industry, more than 65 per cent of raw materials are crude-based derivatives, most of which are imported.

 

Exports now contribute more than 25 per cent of industry revenue. Also, in the last 3–4 years, manufacturers have invested around ₹27,000 crore in greenfield and brownfield projects. When can we see the results of this?

 

The results will come in a staggered manner. The thing about investments in the tyre industry is that it takes time to fructify.