Public capex, infra development focus in Budget to help tyre industry: ATMA

Automotive Tyre Manufacturers Association said the tyre sector is closely linked to performance of transport and infrastructure ecosystem and increase in public capital expenditure

The Indian tyre industry stands to gain from the government's steps to enhance spending on infrastructure announced in the Union Budget 2026-27, Automotive Tyre Manufacturers Association (ATMA) said on Monday.

The tyre sector is closely linked to the performance of the transport and infrastructure ecosystem and the substantial increase in public capital expenditure to ₹12.2 trillion is a significant positive for long-term demand growth, ATMA said in a statement.

The higher capex allocation underscores the government's ongoing push to build future-ready infrastructure across the country, particularly roads, rail connectivity, urban mobility networks and logistics corridors , which are critical drivers of tyre demand across all vehicle segments, it added.

 

"The tyre industry's growth is intrinsically linked to the pace of infrastructure expansion in the country. The government's focus on elevating public capex reinforces demand momentum for tyres across both passenger and commercial vehicles," ATMA Chairman Arun Mammen said.

He further said the increased investment in the transport ecosystem, including dedicated freight corridors and enhanced urban mobility initiatives, will support vehicle utilisation and fleet expansion, benefitting tyre manufacturers nationwide.

Mammen, however, said the long-standing issue of the inverted duty structure impacting the tyre manufacturing sector remains unaddressed.

"We remain hopeful that this will be taken up by the Government in the larger interest of the Make in India initiative," he said.

ATMA said several measures announced in the Budget such as enhanced transport infrastructure in Tier-II and Tier-III cities are expected to stimulate consumption and unlock new demand opportunities for both replacement and original equipment tyres.