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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Pirelli has entered into a strategic agreement with Swedish technology firm Univrses to integrate artificial intelligence-based computer vision systems into its Cyber Tyre platform. As part of the deal, Pirelli has acquired a 30 percent stake in Univrses, with an option to increase that share to a majority holding. The collaboration will embed Univrses’ 3DAI technologies into Pirelli’s existing Cyber Tyre solutions, creating a unified system aimed at producing safer and higher performing vehicles.

The combined technology has potential applications in advanced driver-assistance systems and autonomous driving. It also generates timely, actionable data for road management, helping authorities make better decisions and deploy resources more efficiently. This could lead to fewer road accidents and saved lives. The system uses onboard cameras and tyres to collect feedback on road conditions. Pirelli’s Cyber Tyre, the first integrated hardware and software system of its kind, gathers data from tyre sensors, processes it with proprietary algorithms and communicates in real time with vehicle electronics and the cloud.

Univrses originally developed its technology to help cars understand their surroundings, but it has since been adapted to turn vehicles into AI-powered road monitoring agents. The Swedish company’s 3DAI Engine provides autonomous vehicles with perception capabilities including 3D positioning, mapping and spatial deep learning. Its 3DAI system digitises roadside infrastructure using data from vehicle-mounted sensors like cameras.

A pilot project is already active in Italy. In 2025, Pirelli and the Puglia Region launched a road network monitoring system to create an updated map of infrastructure conditions. The system analyses data from tyres via the Cyber Tyre platform alongside visual data from cameras interpreted by Univrses’ technology.

Andrea Casaluci, CEO, Pirelli, said, “The agreement with Univrses further enhances our Cyber Tyre™ platform, thanks to advanced AI‑based artificial vision technologies. The collaboration between Pirelli and Univrses will make a significant contribution to the ongoing transformation of cars into true software‑defined vehicles.”

Jonathan Selbie, CEO, Univrses, said, “Continuous monitoring and data are becoming the new foundation for infrastructure asset management, and Univrses technology is able to provide powerful analytical capabilities based on reliable and frequently updated data. In this context, we are pleased to welcome Pirelli as an investor and to take our partnership to the next level: we will join forces to deliver increasingly advanced services and products.”

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ZC Rubber is preparing a major European-focused showcase at THE TIRE COLOGNE, scheduled to run from 9 to 11 June 2026. The tyre manufacturer will occupy Booth C050g in Hall 8.1, highlighting its WESTLAKE and GOODRIDE brands with a clear emphasis on products tailored specifically for regional market demands.

The display will blend imminent and future innovations. Products destined for a European launch in the latter half of 2026 will appear alongside the company’s current truck and bus radial lineup. Selected previews of developments planned for 2027 will also be on view. A featured attraction is the Westlake Sport RS2, a drift-proven ultra-high-performance tyre praised for its grip, precision and 180 treadwear rating. A renewed rubber compound, developed through work with the Red Bull Driftbrothers, now delivers steadier traction under severe driving conditions. Appearing at the stand, Red Bull Driftbrothers driver and engineer Elias Hountondji will illustrate how motorsport data directly refines ZC Rubber’s product engineering.

Additional new passenger car radial models for Europe in the second half of 2026 include the Westlake ZuperFlex Z-137, Goodride RideMax G-147, the all-season Westlake Zuper4S Z-411 and the off-road focused Westlake Terra Legend SL399 and Goodride Mud Legend SL388. On the truck and bus side, already available tyres such as the Westlake WSL2, Westlake WDL2+ and Goodride S2, D3 and D4 will be exhibited, covering steer and drive axle needs for long-haul and heavy-duty transport.

A sneak peek at 2027 offerings will feature the Westlake Z-301 commercial van tyre, Goodride All Season G-721, Goodride SnowComfort G-518 and new TBR models including the Westlake WTL2, Westlake WTR OEM and Goodride M2. ZC Rubber’s team will remain on-site throughout the event, welcoming visitors and partners to the booth for meetings and professional discussions.

Leo Liao, General Manager, ZC Rubber Europe, said, “This year’s showcase reflects a much broader and more complete portfolio for Europe. From UHP and all-season tyres to all-terrain, mud-terrain and TBR solutions, we are bringing new developments across almost every major segment. This reflects how seriously we take the European market: we are listening to local needs, investing in the right products and building a portfolio that better matches the needs of our European partners.”

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Magna Tyres has launched the MA801 TR, a new solid tyre engineered for extreme operating conditions in recycling facilities and heavy industrial settings. Designed to maximise equipment uptime while supporting high load capacities, the tyre is built to deliver dependable performance in harsh environments. The official debut of the MA801 TR will take place at IFAT 2026 in Munich, scheduled from 4 to 7 May 2026.

The new model is intended for compact wheel loaders and telescopic handlers, featuring a flat-free solid construction. Its extra-deep non‑directional tread is reinforced by a triangular structural design, which enhances traction and stability on surfaces littered with sharp debris. Available in sizes 13.00‑24 and 14.00‑24, the tyre prioritises puncture resistance and reduced maintenance needs.

Thanks to its robust architecture and deep tread profile, the MA801 TR offers an extended service life and consistent performance across demanding work cycles. By eliminating the risk of flats, Magna Tyres positions the tyre as a reliable solution for recycling and industrial operations where continuous heavy loads are standard.

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The Yokohama Rubber Co., Ltd. has secured validation from the Science Based Targets initiative (SBTi), a prominent corporate climate-action organisation, for its greenhouse gas (GHG) emission reduction targets set for 2035. This endorsement confirms that the company’s goals are scientifically aligned with the standards established under the Paris Agreement. The validated targets are measured relative to the company’s 2024 emission levels.

Under the approved framework, Yokohama Rubber aims for a 63.0 percent reduction in combined Scope 1 and Scope 2 emissions, which cover direct emissions from its business activities as well as indirect emissions from purchased energy. Additionally, the company commits to a 37.5 percent cut in Scope 3 emissions, specifically targeting indirect supply chain emissions from purchased products and services, along with fuel and energy-related activities not included in Scope 1 or Scope 2. To achieve these reductions, Yokohama Rubber has been expanding solar power generation and renewable energy electricity at its global plants, while also disclosing indirect emissions from product distribution, use and disposal since 2013.

The company obtained SBTi validation to accelerate supply-chain-wide emission cuts in response to intensifying climate challenges. Operating under its sustainability management slogan, ‘Caring for the Future’, Yokohama Rubber continues to create shared value by tackling social issues directly through its business operations.

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