The GST Council’s 56th meeting delivered major relief for India’s tyre industry, slashing rates on new pneumatic tyres to tractor tyres. The move, aimed at reducing input costs and supporting rural demand, has been welcomed by manufacturers, though retreaders caution the reforms risk sidelining sustainability.

Sharad Matade and Gaurav Nandi

The Goods and Services Tax (GST) Council, in its 56th meeting, lowered the GST rates on a range of tyre and rubber products on Thursday, in a move aimed at easing input costs for the farming community and providing a much-needed relief to the domestic tyre manufacturing sector. 

The decision, taken by the GST Council, reflects the government’s strategy of supporting rural demand while simultaneously addressing industry grievances over high taxation and duty anomalies.  

One of the headline changes is the reduction of GST on latex rubber thread, which has been cut from 12 percent to 5 percent. Similarly, tyres and tubes used in tractors, a critical expense for farmers, have seen their GST rates slashed from 18 percent to just 5 per cent. 

Rear tractor tyres and their corresponding tubes, along with tyres specifically meant for agricultural tractors, will also benefit from this lower rate.  

The most significant change for the industry is the decision to reduce GST on new pneumatic tyres of rubber, excluding those used in bicycles, cycle-rickshaws, aircraft, and tractors, from the highest slab of 28 per cent to 18 percent. 

Automotive Tyre Manufacturers’ Association (ATMA) welcomed the decision, stating, “Lower GST on tyres will translate into more affordable mobility for millions of users, starting from farmers and small traders to transporters, motorists and logistics operators. It will also help bring down vehicle operating costs, which in turn reduces overall logistics expenses in the economy,” said ATMA Chairman Arun Mammen. 

ATMA further noted that the reduction in GST rates on tyres will support road safety. High prices often discourage vehicle owners from timely tyre replacement, leading to extended use of worn-out tyres, which is a known risk factor for accidents. With the tax burden eased, tyre affordability will improve, encouraging motorists and fleet operators to replace tyres at the right time, thereby enhancing vehicle and passenger safety on roads.

Industry reactions

According to ICRA, the GST rate cut on most tyre categories is expected to boost domestic replacement demand, which makes up nearly two-thirds of India’s tyre market. Lower operating costs will benefit transport operators, improving fleet profitability and cash flows, while reduced logistics costs across industries are set to fuel aftermarket demand.

In addition, lower GST on new vehicles in entry-level, mid-range, and tractor segments should support OEM tyre demand through higher production and sales. The cut on tyre cord fabric, though a small cost component, is also margin-accretive.

In addition to the broad restructuring of tyre-related tax slabs, the GST Council has also moved to reduce the levy on key raw materials used in tyre production. Tyre cord fabric of high tenacity yarn, whether made of nylon, other polyamides, polyesters or viscose rayon, will now attract a Goods and Services Tax of 5 percent, down from the earlier 12 percent.

Exuding optimism on the move, CEAT Chief Executive Officer Arnab Banerjee noted, “We welcome the GST Council’s decision to rationalise tax rates in the tyre sector. The reduction of GST on new pneumatic tyres from 28 percent to 18 percent and the further relief for tractor tyres and tubes to 5 percent, is a progressive step that will significantly benefit the industry. This reform will make tyres more affordable for customers across commercial, agricultural and passenger vehicle segments, while also supporting rural mobility through lower input costs for farmers.” 

Commenting on the market impact of the revised rates, Partner and Automotive Tax Leader at EY India for the Auto sector, Saurabh Agarwal, said, “The rationalisation of GST rates on automotive vehicles and parts is a truly welcome and significant development. By making vehicles more affordable across all segments, this move will not only boost consumer spending but also simplify complex classification disputes that have long burdened the industry. The discontinuance of the cess is a particularly pragmatic step, which will provide much-needed support to a sector that is a vital contributor to our nation’s GDP.”

Commenting on the development, Shantanu Deshpande, Chairman, CII Task Force on Tyre and Managing Director, Michelin India, noted, “Thanks to the government for reducing GST rates on important products, including tyres. These changes will help lower costs for manufacturers and make tyres more affordable for consumers, while also enabling simplification and ease of doing business for the tyre industry. These changes complement the robust growth and improvement made in our road infrastructure and will further boost the growth of the industry. The new rates will support local manufacturing, encourage investment, increase business volumes and help India become more self-reliant in tyre manufacturing. We deeply appreciate this enabling decision.”

Commenting on the issue, Senior Vice President, India & SAARC, Yokohama-ATG, Anuj Thakar, said, “The cut in GST from 18 percent to 5 percent on tractor tyres and tubes and 28 percent to 18 percent on new pneumatic tyres is a historic reform that will directly benefit the farmers and off-highway tyre customers in India. As makers of Alliance and Primex Tires, we see this GST reduction as an opportunity to assist our consumers in choosing the right application-specific mobility solutions at lower operating costs.”

Retreaders’ woe

While the council’s move is slated to benefit the OE and aftermarket, retreaders aren’t happy. 

Tyre Retreading and Education Association Chairman Karun Sanghi said, “The GST on retreading remains stuck in the same slab despite representations to the GST Council even two weeks ago. The government promotes recycling and reducing carbon footprint, but has overlooked retreading in its policies. Tractor tyres have GST reduced to 5 per cent, while retreading is still at 18 per cent. This narrows the price gap between new and retreaded tyres, hurting demand for retreading and undermining recycling and carbon goals. Ideally, GST on retreading should have been reduced to 5, in line with new tyres.”

Currently, 80–90 percent of the retreading market is truck tyres, while 10–15 percent is farm, OTR and tractor tyres. The industry expects a significant impact on the tractor and commercial segments. 

However, Sanghi noted that as an association, they will continue to approach the government, highlighting the retreading and environmental benefits, though lobbying power is far weaker compared to other organisations in the industry, which may explain why retreading’s concerns are often sidelined.

While the GST cuts mark a win for tyre makers and farmers, retreaders remain burdened by an unchanged rate. This threatens recycling demand and carbon reduction efforts even as affordability improves for new tyres. The industry now looks to the government for parity that balances growth with environmental goals.

Comments (0)

ADD COMMENT

Link Copied!

Sri Trang Agro-Industry Public Company Limited (STA) has been honoured with the ‘Highest Revenue Business – Southern Region’ award at the Prachachat Business Awards 2026. The recognition, presented during a ceremony at Paragon Hall in Bangkok on 28 May 2026, is based on performance metrics and tax contributions evaluated by Prachachat Business News, the Department of Business Development and Creden Asia Company.

This accolade underscores STA’s pivotal role in advancing Thailand’s natural rubber sector and its dedication to sustainable, stable growth. The company continues to enhance competitiveness and operational efficiency while generating value for stakeholders, including farmers, partners, employees and investors. Amid global industry shifts, STA is committed to raising domestic rubber standards and strengthening its international market position.

The organisation prioritises responsible supply chain management, transparency and strong corporate governance. By integrating digital platforms and artificial intelligence, STA is modernising data connectivity across its operations, facilitating the industry’s transformation into the digital age and ensuring long-term resilience.

Comments (0)

ADD COMMENT

Link Copied!

Doublestar Tire showcased its European-market product portfolio at The Tire Cologne 2026, held in Germany from 9 to 11 June. The international exposition drew specialists from more than 100 countries and served as a venue for presenting sector-wide progress in sustainable manufacturing, intelligent production systems, and advanced material science. For Chinese tyre makers, the fair represents a strategic avenue into the European arena, and the company used this opportunity to reinforce its commercial momentum within the region.

Visitor interest at the manufacturer's stand remained high throughout the event, with many industry peers examining the aesthetic qualities and technical specifications of the displayed items. Product offerings fell into two principal categories, heavy-duty solutions and light-vehicle tyres, each engineered to satisfy distinct operational demands prevalent across European roads.

Among the commercial range, the DLD816 all-weather tyre emerged as a notable entry for extended haulage operations. Its construction incorporates cold-weather features and a reformulated rubber layer that extends operational lifespan, while closely spaced tread patterns furnish dependable grip under varied climatic circumstances. Stopping distance reductions on frozen surfaces received particular attention from logistics professionals.

The passenger side featured the DSU08 summer variant, which employs refined dynamic control architecture to harmonise acoustic comfort with responsive steering and durable construction. With a newly operational production facility in Cambodia complementing its European launch, the enterprise continues to cultivate its overseas standing through sustained client engagement and incremental market development.

Comments (0)

ADD COMMENT

Link Copied!

Continental is showcasing an expanded military tyre portfolio at Eurosatory 2026 in Paris, with exhibits on display in Hall 5B at Booth A197. The lineup addresses a broad spectrum of operational needs, ranging from lightweight off-road vehicles to heavy logistics trucks and tactical deployment units, with a focus on maintaining mobility across difficult terrain, extreme loads and high-speed conditions.

Trade visitors to the Continental stand can examine flagship products such as the SOT Traction for heavy tactical platforms, the HCS for medium tactical and logistics vehicles and the Grabber X3 for light off-road applications. Each tyre is engineered for dependable performance on soft ground and in rugged environments, while the company’s sales representatives remain on-site throughout the event for individualized consultations to match specific mission profiles with appropriate tyre solutions.

Tyres in this category are distinguished by specialised tread designs, reinforced load-bearing capacities and adjusted speed ratings, alongside rugged constructions that ensure reliability during off-road operations. Continental develops these products through close cooperation with global customers, including national armed forces and original equipment manufacturers, integrating real-world operational feedback into the design process.

The company is actively broadening its defence-oriented tyre range, with all models conforming to stringent international standards for durability, safety and performance under extreme conditions. Longstanding partnerships in the military sector inform continuous product refinement, incorporating direct input on performance requirements. Eurosatory, held biennially in Paris, serves as a premier global venue for defence and security technology, drawing manufacturers, suppliers, military leadership and international delegations.

Matthis Riekemann, Project Lead at Continental responsible for developing the company’s military tyre business, said, “Eurosatory provides the ideal platform to present our expanded tyre portfolio for military vehicles. With our extensive experience in the tyre industry, technological expertise and global presence, as well as our distribution and service network, we deliver advanced tyre solutions that are precisely tailored to our customers’ needs.”

Comments (0)

ADD COMMENT

Link Copied!

Michelin has expanded its retail network in Rajasthan by opening a new Michelin Tyres & Services outlet in Bikaner. The facility results from a partnership with Bhagwati Tyres and is situated on Jaipur Road near the Khatu Shyam Temple. This location is intended to improve regional access to the company’s premium tyre products and advanced automotive care.

The 7,000-square-foot establishment functions as a contemporary mobility hub with customer-focused infrastructure. Shoppers can find high-end tyres for passenger cars and two-wheelers, while on-site technicians provide wheel alignment, balancing and nitrogen inflation. The official opening ceremony featured Annu Mehla, the North and East B2C regional sales head, alongside representatives from Bhagwati Tyres.

Bhagwati Motors Nokha Private Limited has operated in Rajasthan since 2006 and possesses more than 20 years of local market experience. The firm has made substantial investments in spacious retail spaces to elevate the tyre buying experience. Through its collaboration with Michelin, the enterprise seeks to offer tyre solutions that emphasise safety, longevity and strong performance, thereby aiding the region’s automotive sector.

Shantanu Deshpande, Managing Director, Michelin India, said, “As mobility aspirations continue to evolve across India, we are seeing growing demand for premium products and high-quality automotive services beyond traditional metropolitan markets. Bikaner represents an important growth market for Michelin in Rajasthan, driven by increasing vehicle ownership and a rising appreciation for performance and safety. This expansion is aligned with our plans to introduce Made-in-India passenger car tyres, reinforcing our commitment to delivering globally benchmarked products tailored for Indian consumers.”

Comments (0)

ADD COMMENT

Link Copied!