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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The Association of Natural Rubber Producing Countries (ANRPC) recently hosted a high-level delegation from the Rubber Development Division of the Ministry of Plantation and Commodities Malaysia at the ANRPC Secretariat. Led by Peter Dennis of Malaysia’s Rubber Development Division, the group met with ANRPC Secretary-General Dr Suttipong Angthong and his team.

The discussions centred on essential industry issues, particularly the vital importance of achieving stable rubber prices for the benefit of producers and the broader market. Conversations further delved into analysing recent market trends and their consequences for global production and trade dynamics.

This engagement highlighted the ongoing necessity for cooperative action to address sectoral challenges, advance sustainability and ensure resilient growth in the face of variable economic conditions.

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Bridgestone Americas has unveiled its latest flagship winter tyre, the Blizzak IcePeak, which will launch nationwide in May 2026. This new tyre is distinguished as the first from Bridgestone to achieve both the rigorous 3-Peak Mountain Snowflake and Ice Grip certifications, marking a significant advancement in winter performance. Designed to cater to a broad range of vehicles – including sedans, minivans, CUVs, SUVs and trucks – the IcePeak will replace the Blizzak WS90 and DM-V2 models. It will be available in 107 sizes, ultimately covering approximately 97 percent of the US light-duty vehicle market, with the majority of sizes ready at launch.

The tyre’s development centres on delivering superior winter traction alongside improved durability and efficiency, leveraging the company’s ENLITEN technology. This integration aims to lower rolling resistance for better fuel economy and extend tyre wear life, offering long-term cost savings for drivers. Internal testing indicates the IcePeak surpasses the wear life of its predecessors while maintaining effective traction. Its compatibility extends to conventional, hybrid and electric vehicles, emphasising its modern engineering.

Key to its performance is a suite of specialised technologies. Bridgestone’s patented MultiCell compound is engineered to enhance stopping power on ice, a claim validated by the official Ice Grip certification. This certification requires performance on ice to exceed a standard reference tyre by at least 18 percent in braking tests. For snow traction, the tyre employs optimised tread blocks and full-depth 3D sipes to create additional biting edges, helping vehicles gain grip and reduce spin.

Building upon the Blizzak lineage, which spans nearly four decades of innovation, the IcePeak introduces refined design elements. Its optimised compound is formulated for added durability across multiple winter seasons without sacrificing grip. A newly unified global tread pattern incorporates several critical features: strategically placed sipes are angled to maximise the gripping edge, protrusions on tread blocks prevent water intrusion on ice and micro-grooves help clear the thin water film that forms on icy surfaces. Together, these features aim to provide drivers with reliable control in wet, snowy and icy conditions, advancing the brand’s reputation for winter safety and performance.

Ian McKenney, Senior Product Manager, Bridgestone Americas, said, “Our Blizzak tyre lineup moves from strength to strength, continually raising the standard for impressive winter weather control. With the application of ENLITEN technology, we are able to expand the tyres’ performance envelope in all directions while also delivering greater durability and reduced rolling resistance, while promoting a focus on enhanced sustainability.”

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Citira, a circular tyre management provider, is introducing a nationwide emergency tyre service in Sweden for commercial fleets, a strategic move to become a comprehensive tyre management partner. Named Citira 24/7 Däckjour, it provides a dedicated contact point for heavy vehicle operators needing immediate assistance, day or night.

This service connects customers to an established, quality-assured network of professional tyre workshops across the country. By utilising pre-assembled replacement wheels ready for immediate deployment, the system ensures rapid on-site repairs to maximise vehicle uptime and minimise operational disruptions.

Clients also benefit from predictable, agreed-upon pricing and consolidated billing, which simplifies administration and enhances budget control. This integrated offering is designed to streamline daily operations, reduce downtime and deliver a more seamless support experience for truck and bus companies.

Göran Bengtsson, Head of Sales at Citira Sweden, said, “This is an important milestone for us to be to able offer our Swedish heavy vehicle fleet customers. This has been frequently requested to us, and we are happy to be able meet the demand, providing a new level of reliability and convenience for our customers.”

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Michelin has unveiled the X-Ice Snow+ tyre, a premier winter product designed to meet the heightened demands of modern, unpredictable winter weather. This new offering provides increased performance and durability over its predecessor, specifically engineered to tackle severe seasonal challenges. Its advanced FLEX-ICE 3.0 tread compound optimises braking performance across a spectrum of conditions, including ice, snow and both wet and dry roads, ensuring reliable control during freezing rain or on treacherous black ice.

The tyre's proven tread design delivers superior start-up traction in deep snow compared to three leading competitors and offers strong lateral grip for stability on slick, icy corners. Beyond immediate safety, the X-Ice Snow+ is built for long-term value and efficiency. It achieves an extended tread life, lasting more than 26 percent longer than key rival tyres. Furthermore, through a specialised low-energy-loss compound that minimises rolling resistance, it delivers up to 34 percent better efficiency, which supports fuel savings and extends electric vehicle range without sacrificing winter traction. Passenger comfort is enhanced by proprietary Piano Acoustic Tuning Technology, a system engineered to reduce road noise for a quieter ride.

Available for dealer order starting in May 2026 for the winter selling season, the Michelin X-Ice Snow+ tyre will be produced in 15- to 23-inch sizes to accommodate a broad range of vehicles, including sedans, CUVs, SUVs, pickups and both hybrid and electric models.

Omer Waysman, Vice President – B2C Marketing, Michelin North America, Inc, said, “For more than 130 years, Michelin has continued to push the boundaries of innovation by improving our technologies to meet the needs of mobility across the globe. With the new Michelin X-Ice Snow+ tyre, we have taken everything drivers loved about the previous generation tyre and improved key areas. This new tyre delivers excellent winter performance, longer-lasting durability and greater efficiency, giving drivers a dependable advantage when the weather is at its worst.”

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