In US-China trade war, Indian tyre makers could take a hit

Indian firms will face higher competition as China, other countries divert a share of exports

- Ayaan Kartik

Indian tyre exporters who were bracing for tougher competition in international markets after the US unleashed higher tariffs on nearly 100 countries have another factor to contend with: the escalating trade war between the US and China.

US president Donald Trump's administration on Wednesday raised import taxes on Chinese goods to 104%, in retaliation for China deciding to counter the US reciprocal tariffs with its own.

China last year exported rubber tyres worth nearly $1 billion to the US, which is the largest importer of rubber tyres.

While the US is a major market for Indian tyre makers, accounting for about one-fifth of their nearly $3 billion exports in 2023-24, Europe and Latin America are also key destinations.

Industry experts believe Indian companies will face higher competition in these markets if China and other countries affected by Trump's tariffs decide to divert a share of their tyre exports from the US to other nations.

"With the imposition of US tariffs, the supply chain could witness disruptions along with price increase for consumers in the US," said Shefali Joshi, senior analyst, India Ratings and Research.

"The Indian companies might look for establishing manufacturing facilities in the US to cope up with the challenge."