West Asia crisis may hit Indian tyre industry; ATMA seeks policy support

Tyre makers warn that the West Asia conflict may disrupt exports, raise crude-linked input costs and strain supply chains, prompting ATMA to seek urgent policy support

The ongoing geopolitical tensions in West Asia could disrupt exports, raise input costs and strain supply chains for India’s tyre industry, prompting the Automotive Tyre Manufacturers Association (ATMA) to seek urgent policy support from the government.

 

In a representation submitted to the Centre, the industry body warned that the escalating conflict in the region is likely to impact tyre exports, increase raw material costs and create logistical bottlenecks for manufacturers.

 

India exports tyres worth around $250–260 million annually to West Asia, and these shipments could face disruptions if tensions continue to escalate. ATMA also cautioned that instability in key maritime routes, including the Strait of Hormuz and the Suez Canal, may affect shipments to Europe, the United States and Africa, leading to longer transit times and higher freight costs.

 

The industry is simultaneously facing rising input costs due to volatility in crude oil prices, which are currently hovering around $100 per barrel. Crude oil derivatives account for 60–70 per cent of the raw material cost in tyre manufacturing. Key inputs such as synthetic rubber, carbon black, processing oils and tyre cord fabrics are all derived from crude oil, making the sector particularly vulnerable to price fluctuations.

 

Supply chains for raw materials are also at risk due to disruptions in global shipping routes. The tyre industry relies heavily on imports of several critical inputs, including natural rubber, synthetic rubber, chemicals, nylon tyre cord fabric and other petrochemical derivatives.

 

“For the Indian tyre industry, the combined impact of rising input costs, freight disruptions and export uncertainties could affect competitiveness in international markets,” said Arun Mammen, chairman, ATMA. He added that timely policy support would be crucial as India seeks to strengthen its export momentum.

 

ATMA has urged the government to consider reinstating the earlier scheme for remission of duties and taxes on exported products (RoDTEP) rates for tyres, enhancing duty drawback rates, and addressing the inverted duty structure between tyres and natural rubber, a key raw material.

 

The association has also requested the government to ease import restrictions on natural rubber by removing port limitations, scrapping pre-import conditions and restoring the export obligation period to 18 months. It has further sought a waiver or reduction in import duties on key raw materials that are either in short domestic supply or not manufactured in the country.

 

Additionally, ATMA has asked the government to classify the tyre industry and its Tier-1 supply chain as “essential sectors” to ensure uninterrupted supply of natural gas and LPG, which are critical for tyre manufacturing. Any disruption in the availability of these fuels, the association warned, could affect production and have cascading effects on the broader mobility ecosystem, including logistics, agriculture, healthcare and public transport.

 

ATMA said timely policy intervention would help maintain stability in the sector and protect India’s growing position in the global tyre market.