India’s tyre industry is bracing for a tough fiscal year, weighed down by sluggish demand, volatile raw material prices and muted export growth. Revenue is forecast to expand just 7-8 percent – supported by modest price hikes and a marginal rise in volumes – marking a second straight year of single-digit growth. However, operating margins are set to contract sharply as natural rubber prices remain elevated despite recent moderation. In a wide-ranging discussion, Anuj Sethi, Senior Director at CRISIL Ratings, unpacks the factors shaping the sector, from price pressures and replacement demand to global headwinds and evolving trade dynamics.

How would you characterise the current fiscal year for the Indian tyre industry, considering its challenges and opportunities?

With volume expected to grow just by about 3-4 percent due to sluggish demand, overall revenue growth will remain in single digit for the second straight year, this fiscal. On the other hand, high raw material prices, especially of natural rubber, rose sharply over the past 12 months and have only recently begun to moderate. To a moderate extent, tyre manufacturers are increasing tyre prices in the replacement market to offset the impact of higher input prices, albeit operating profitability will still be impacted this fiscal.

The report mentions 7-8 percent revenue growth this fiscal year, supported by a 3-4 percent increase in realisations and volume. What specific factors could push growth beyond this forecast, and what risks might undercut it?

While realisation growth due to price hikes being undertaken by tyre manufacturers is a certain given sharp increase in natural rubber prices, higher than projected volume growth could take the growth higher than expected. With about 2/3rd of the domestic demand

coming from replacement segment, and it being the primary volume driver, any significant decline in that demand can impact the growth forecast other way.

Given that replacement demand is the primary volume driver, how do you assess the longevity of this demand surge in the context of evolving consumer preferences and vehicle usage patterns?

The replacement demand is expected to sustain over the medium term driven by the strong automotive sales achieved in previous fiscals.

With operating profitability projected to drop 300 basis points, what contingency measures are tyre makers considering beyond gradual price increases to mitigate this impact?

The price of natural rubber, which constitutes about half of the raw materials, continued to surge sharply in the first half of fiscal 2025. However, ability to pass on this increase is limited due to modest volume growth. Small price hikes and continued focus at improving operating efficiencies on an ongoing basis is another way to offset the impact to some extent.

Natural rubber prices have been highly volatile, reaching record highs and then falling to around INR 170 per kg. What is your outlook for natural rubber prices in the near to medium term, and what factors will likely influence their movement?

The sharp rise in natural rubber prices is due to a global shortage caused by inclement weather in major producing countries such as Thailand and Vietnam, which account for about half of the global production. Going forward, increase in supply with improving hectarage and slowdown in global economies is likely to drive correction in international rubber prices. In the last couple of months, some moderation in natural rubber prices has happened.

China has a surplus in crude oil-derived raw materials, including carbon black and other chemicals. Do you anticipate this surplus impacting global prices for these commodities, and how might Indian tyre makers benefit or face challenges as a result?

Share of natural rubber in tyre manufacturing is 47 percent, while carbon black accounts for ~20-22 percent. Should carbon black prices remain under control, it will benefit domestic tyre manufacturers.

Export growth is expected to remain muted at 2-3 percent. How does the current geopolitical climate, including sanctions or trade restrictions, further complicate Indian tyre makers’ access to markets in North America and Europe?

Export growth is expected to remain sluggish due to challenging business conditions in US and Europe. However, certain segments like off-the-road tyres are beginning to see better prospects as stocks with dealers are moderating. This could help players with presence in the off-the road- tyre segment.

Exports to key markets such as North America and Europe are under pressure due to economic challenges and unviable operating costs, leading to plant shutdowns in regions like US, Europe and Israel. Is the Indian tyre industry at risk of facing similar challenges, or does it have structural advantages that mitigate these risks?

Indian players are better placed compared to some of the western peers due to comparatively lower cost of operations, though operating profitability has come under pressure this fiscal because of higher imported rubber prices. Also, Indian players have flexibility to supply in small batch sizes unlike Chinese peers, and hence this also works to their advantage, more prominently in higher margin segments such as off-the road tyres.

Have tyre makers explored new international markets or alternative trade routes to counter supply chain disruptions and higher freight costs?

Not really; to circumvent the difficult environment around the Suez Canal, vessels are going around the Cape of Good Hope, adding 2-3 weeks and additional freight cost on exports. Some of the costs are being shared with the customers.

The report references Extended Producer Responsibility (EPR) regulations. How significant is the financial and operational burden of compliance for tyre makers, and what progress has been made in addressing this?

Adoption of EPR regulations is not expected to have a very sizeable impact on profitability, though it will lead to investments in strengthening processes and in technology.

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CarbonX has announced that Daniela Sordi, its Chief Technology Officer and co-founder, has been appointed a Fellow of the Netherlands Academy of Engineering, the country’s leading body representing excellence in engineering, technology and applied scientific innovation.

Sordi is one of 15 experts selected for the Fellowship, which recognises engineers who have demonstrated significant impact in their fields and who contribute to major societal transitions.

Sordi is internationally recognised for her work on advanced three-dimensional structured carbon materials designed to improve lithium-ion battery performance. She has more than 17 years of experience across research and industry, translating chemistry and materials science into manufacturing technologies.

At CarbonX, she has led the development of battery materials that the company says charge faster, last longer and are up to five times more sustainable than conventional synthetic graphite. Under her technical leadership, the company has secured funding from the European Innovation Council Accelerator and advanced efforts to strengthen Europe’s autonomy in energy-storage materials.

“Daniela’s appointment to the NAE is an outstanding recognition of her ability to bridge groundbreaking science with high-impact industrial innovation,” said Rutger van Raalten, chief executive of CarbonX. “Her work lies at the core of our mission to enable cleaner, more efficient, and more sustainable energy technologies on a global scale.”

The appointment also highlights Ms Sordi’s role as a visible advocate for engineering careers, particularly for women entering deep technology and advanced materials. Her career is frequently cited as an example for students pursuing technical and innovation-led professions.

The Netherlands Academy of Engineering brings together senior engineers from academia, industry and applied research. Its members contribute to national and international innovation agendas and advise on technological responses to challenges such as climate, energy, health and digitalisation.

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Toyo Tires has achieved a new benchmark in sustainable tyre design with a concept model composed of 96.5 percent renewable and recycled materials. This marks the company’s highest sustainable content to date, surpassing its own previous 90 percent sustainable concept and demonstrating ongoing progress in substituting traditionally hard-to-replace components without sacrificing performance.

The materials are categorised as either renewable, constituting 61.5 percent of the tyre, or recycled, making up the remaining 35 percent. Renewable inputs are derived from biomass and plants, including specialised rubbers, polyester fibres, silica from rice husk ash and oils. The recycled portion incorporates carbon black, steel components and a novel CO₂-derived rubber developed with the University of Toyama. A key technical breakthrough involved successfully integrating recycled sulphur and zinc oxide, which are vital to the tyre manufacturing process and have historically presented significant replacement challenges. This integration was accomplished using the company’s established production and compounding expertise.

This concept represents a critical step toward Toyo Tire’s publicly stated goals of utilizing 40 percent sustainable materials by 2030 and achieving full 100 percent adoption by 2050. Beyond its material composition, the tire has also earned a top-tier ‘AAA’ rolling resistance rating in Japan. This high rating signifies extremely low energy loss during operation, which can help extend electric vehicle driving range and reduce overall lifecycle greenhouse gas emissions.

Moving forward, Toyo Tire intends to advance its research and technical development with the objective of transitioning these innovative material applications and design principles into future commercial products. This effort is part of the company’s broader commitment to fostering a more sustainable mobility ecosystem.

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Shakti Cords Pvt. Ltd has appointed Purushothama Kini as managing director of Shakti Cords and its group companies, marking a leadership transition at the textile reinforcements manufacturer.

Kini brings more than three decades of experience in the industrial and technical textile sector. His background includes manufacturing excellence, operational transformation, quality systems and global customer engagement.

The company said his leadership experience in driving sustainable growth, strengthening processes and supporting organisational development would be a key asset as Shakti Cords continues to position itself as a reliable partner to customers.

Shakti Cords was established in 2003 and manufactures textile reinforcements for the rubber industry. Its product range includes single-end dipped cords, industrial hose yarns and single-end tyre cords made from polyester, aramid, PVA, nylon 6/66 and rayon. These materials are used in power transmission belts, industrial hoses and performance tyres.

The company said the use of high-modulus, low-shrinkage dipped cords and high-tenacity braiding yarns improves strength and operational performance across these applications.

Shakti Cords, as per the company website, has a total production capacity of 3,000 tonnes a year for single-end dipped cords and dipped industrial hose yarns. It holds the largest share of the Indian market for dipped single-end yarns and cords.

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OTR Engineered Solutions has named Oscar Torres as its new President and Chief Executive Officer, effective 5 January 2026. With over 25 years of executive leadership, primarily within private equity–backed aerospace aftermarket firms, Torres possesses substantial industry expertise.

His extensive career was largely spent at Kellstrom Aerospace, where he progressed through roles such as Chief Financial Officer, Chief Operating Officer and ultimately Chief Executive Officer. In these capacities, he was instrumental in enhancing operational performance and fostering sustainable growth. His strategic direction included overseeing several acquisitions and divestitures, which solidified the company's position as a premier global supply-chain solutions provider for a wide range of aviation clients.

Torres's academic credentials include a Bachelor of Accounting from Florida International University and an MBA from the University of Miami. He is also a Certified Public Accountant. The organisation anticipates that his leadership will guide OTR in maintaining its commitment to delivering high-quality solutions and exceptional service to its clientele.

Hector Ramirez, Interim President of OTR, said, “Oscar’s proven leadership, collaborative approach, and deep industry knowledge make him exceptionally well suited to lead OTR into its next phase of growth. We are excited to welcome him and are confident in the value he will bring to our customers, partners and stakeholders.”

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