Tyre exports from India are expected to cross Rs 12,000 crore for the first time this fiscal after having clocked a turnover of Rs 6,314 crore in the first half of the year.
Tyre exports have been growing for the past three years. From Rs 8,824 crore in year 2015-16, tyre exports from India went up to Rs 9,658 crore in 2016-17 and crossed the 10K crore mark for the first time to stand at Rs 11,180 crore in 2017-18, industry body automotive tyre manufacturers association (ATMA) said.
“During the current year also tyre exports have continued momentum of the previous two years. The industry is expected to end the current fiscal with an export turnover of Rs 12,000 crore as order book position is healthy”, said Mr Anant Goenka, chairman ATMA.
Indian tyre industry has been able to increase its export competitiveness due to its increased emphasis on research & development. Four Indian tyre companies rank amongst the top 20 in the world in terms of R&D spend as a percent of sales as well as in absolute R&D spend. Currently about 2 per cent of the revenue is being invested on R&D by tyre industry, which matches fairly with the global average.
“India has some of the finest radial tyre manufacturing facilities. International vehicle majors (OEMs) have been rolling out vehicles on India-made tyres. All these have had a rub-off on tyre exports too. Cost efficiency and customisation have also helped in making exports competitive”, said Goenka.
Indian manufactured tyres are being exported to more than 100 countries in the world including the US and European countries. In fact US is the largest export destination for Indian manufactured tyres accounting for 13% of total export turnover. Germany is the second largest with more than 7% share. The top 10 export destinations have several discerning countries including France, Italy and Brazil.
“India produces one of the largest varieties of tyres manufactured anywhere in the world. In 2007-08,
tyre production numbers stood at nearly 80 million units. The same has increased to nearly 180 million units in FY 2017-18”, added Goenka.
While private investment growth has remained muted in India in recent years, tyre industry stands out for the substantial investments made to support the automobile and economic growth. An investment of nearly Rs 51,000 crore (US$7 billion) has just been completed or is currently lined up in both Greenfield and Brownfield expansion by the industry.
The industry has potential to increase its export turnover immensely if a level playing field is granted matching other tyre manufacturing countries, ATMA said. High custom duty of 25 per cent on natural rubber, port restrictions on import of NR and pre import condition for NR import against tyre export obligation have been hurting the industry.