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.

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Hankook Tire has been honoured with a Ministerial Commendation by the Ministry of Trade, Industry and Resources of Korea. The honour was conferred at the 2025 Outstanding Overseas Investment Contributors Awards, an event hosted at the Korean Cultural Center in Budapest, Hungary, designed to recognise firms that enhance national competitiveness through global investment. During the ceremony, the company's leadership detailed its achievements to an audience of diplomatic officials and fellow Korean businesses operating in the region.

The award celebrated Hankook Tire's excellence across four critical areas. Economically, its strategic manufacturing base in Rácalmás, Hungary, established in 2008, has become a significant contributor to the Korean economy through consistent profit repatriation. The company has also acted as a catalyst for other Korean enterprises, enabling market entry for supply chain partners while securing its own strategic alliances within Europe, thereby strengthening the collective agility and global standing of Korean industry.

Beyond commerce, the company's deep local social commitment was highly recognised. The Hungarian plant is a cornerstone of the regional economy, having multiplied its local workforce to approximately 3,000 employees and maintaining this stability even through periods of global economic uncertainty. This commitment extends through extensive community outreach, including the long-term donation of tyres to enhance public and private mobility safety, alongside targeted investments in local infrastructure, social welfare and youth scholarships.

Furthermore, Hankook Tire serves as a central pillar for the Korean business community in Hungary. By holding leadership roles in major business associations, the company facilitates essential dialogue and practical cooperation, helping to resolve common challenges and support the sustainable operation of Korean enterprises in the market. Through this powerful combination of economic performance, social integration and community leadership, Hankook Tire exemplifies the impactful role of responsible overseas investment in fostering mutual growth and strengthening international ties.

Ho Taek Lim, Managing Director of Hankook Tire Hungary plant, said, “As a representative company with deep roots in Hungary, Hankook Tire is committed to fostering unity within the Korean community and supporting the successful establishment of Korean companies entering the market. Through close collaboration with local institutions, we will continue enhancing the competitiveness of Korean companies in Europe while advancing Korea’s national interests.”

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Apollo Tyres Ltd has introduced the Vredestein Comtrac 2+, a new summer tyre engineered for light commercial vehicles. Set for a European launch in January 2026, this premium model will be available in 21 sizes for rims from 15 to 17 inches, including extra-load variants for heavier demands. It builds upon its predecessor with significant advancements in durability, efficiency and overall performance, aiming to lower the total cost of ownership for fleet operators.

A key innovation is a fourth-generation polymer compound, which boosts abrasion resistance by 13 percent. This advancement extends tread life, reduces replacement frequency and minimises the release of microplastics from wear. The tyre’s construction includes a reinforced bead area and a robust carcass for enhanced stability and reliability under heavy loads, improving vehicle uptime. Safety in wet weather is addressed through a specialised silica filler and an efficient tread pattern designed to prevent aquaplaning by rapidly dispersing water.

Furthermore, the Comtrac 2+ achieves a seven percent reduction in rolling resistance, improving fuel economy for conventional vehicles and helping to extend the driving range of electric and hybrid vans. Every aspect of the tyre is crafted for maximum longevity and cost efficiency, supporting business operations with fewer interruptions. The product also meets the stringent requirements of the European Union Deforestation Regulation, aligning with contemporary environmental and sustainability standards.

Yves Pouliquen, Vice President, Commercial EMEA, Apollo Tyres Ltd, said, “With the Comtrac 2+, we set out to address the changing demands of today’s light commercial vehicle operators, whether independent trade professionals or major fleet managers. Our R&D Team has engineered the tyre to deliver longer tread life, lower rolling resistance and a safer, more comfortable ride that drives greater efficiency – all at an accessible price point.”

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MRF Tyres has once again proven its motorsport pedigree by securing the 2025 FIA European Rally Championship Team Title. The official accolade was presented at the season-ending FIA Awards Gala in Tashkent, where Vice-Chairman and Managing Director Arun Mammen collected the trophy. This gala represents the pinnacle of the international motorsport calendar, formally recognising champions from across the discipline.

This victory marks the team’s third ERC crown, following previous successes in 2022 and 2023. It was earned through a campaign defined by remarkable consistency and adaptability across diverse rally stages. Strategic tyre choices and seamless coordination between the team’s personnel, engineers and driving crews were fundamental to this achievement, highlighting the programme’s overall strength and the reliability of its products.

The company has extended its appreciation to every individual who contributed to this result. The recognition at such a distinguished forum reinforces the company’s commitment to excellence and cements its position as a leading force on the global rally stage.

Mammen said, “We are deeply honoured to receive the Team Title at such a prestigious occasion. This award recognises not only the work of our engineers and staff, but also the spirit, dedication and resilience of the entire MRF Tyres organisation, both on and off the stages of the 2025 European Rally Championship. When preparation, performance and passion come together, tyres can make the difference. This trophy underlines our commitment and encourages us to continue delivering our very best in the seasons to come.”

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Balkrishna Industries Ltd (BKT Tires), a global leader in Off-Highway tyre manufacturing, has reinforced its commitment to India’s healthcare and sports development by enabling the establishment of a world-class Sports Injury and Rehabilitation Centre at King Edward Memorial (KEM) Hospital in Mumbai through its CSR arm, the BKT Foundation. Spread across more than 15,000 square feet within the hospital premises, the facility represents a significant addition to public healthcare infrastructure while responding to the growing needs of India’s evolving sports ecosystem.

Designed to serve athletes from diverse disciplines, the centre is expected to emerge as one of western India’s most comprehensive rehabilitation hubs within the public healthcare system. With the ability to support more than 1,000 athletes each year and facilitate over 500 specialised surgical procedures, it aims to accelerate recovery, enhance performance and help sportspersons prepare for competition at national and international levels.

Clinical leadership of the facility rests with Dr Roshan Wade, sports specialist and additional professor in the Orthopaedics Department, who will work alongside a multidisciplinary team of surgeons, physiotherapists, rehabilitation experts and nutrition professionals. Together, they will deliver integrated and end-to-end care under one roof, addressing both injury management and long-term physical conditioning.

The centre houses a fully equipped operation theatre complex with three advanced surgical rooms, a 20-bed inpatient ward and ICU-backed post-operative care. Its rehabilitation wing features high-end technologies including hyperbaric oxygen therapy, zero-gravity and underwater treadmills, virtual reality-based recovery systems and a specialised gait analysis laboratory. Outpatient services are supported by consultation rooms, in-house imaging such as X-ray and scannogram facilities and a wide range of interventional therapies.

The inauguration on 14 December 2025 was attended by senior leadership from BKT, municipal authorities and KEM Hospital, underscoring strong public–private collaboration. With an investment of approximately INR 200 million and a multi-year agreement ensuring equipment upkeep and infrastructure support, the project reflects BKT Foundation’s broader vision of strengthening healthcare capacity while nurturing India’s sporting potential.

Arvind Poddar, Chairman and Managing Director, BKT, said, “At BKT, we believe progress truly happens when communities move forward together. ‘Growing Together’ is more than a motto for us. It guides our decisions. By creating this centre with KEM Hospital and the BMC, we want to make world-class treatment accessible to every athlete. We are confident this facility will help many sportspersons return stronger.”

Vijayalaxmi Poddar, Chairperson, BKT-CSR committee, said, “This project reflects the values BKT stands for – Care, Dignity, Accessibility and Empowerment. Our goal was to create a space where healing is dignified and where every athlete feels supported at every stage of recovery. We want our youth to believe that their dreams are achievable, and we stand with them as they pursue excellence.”

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