Increase in tyre prices in India

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By Farhan Mansuri

Increase in tyre prices in India

Tyres are a very important part of any vehicle. Because of tyres, your vehicle can go from point A to Point B and they make sure the ride is smooth, and safe. However, lately, the prices of tyres in India have been going up rapidly after covid19 pandemic. This is causing concern for many people, especially the ones who drive taxis and ola and uber. In this article, we will take a closer look at why tyre prices are rising in India and how it affects the people who buy them.

Impact of COVID-19

One of the main reasons for the increase in tyre prices is the impact of COVID-19. The pandemic has caused a disruption in the supply chain all over the world, which has led to reduced production and sales of tyres. Additionally, due to supply chain disruptions transportation costs have also gone up, which has added to the cost of tyres. Many tyre manufacturing companies had to shut down their factories for a period of time due to the lockdowns, resulting in a shortage of tyres in the market. This has resulted in a shortage of tyres in the market and has caused the prices to increase.

Increasing cost of raw materials

Another reason for the increase in tyre prices is the rising cost of raw materials. Tyres are made from natural rubber and other materials like carbon black and oil, and the cost of these materials has seen a sharp surge post-pandemic. A key determinant of input cost for tyre companies is the price of crude oil, which is up nearly 85% in the last 1 year. An increase in demand for natural rubber and other raw materials also led to an increase in tyre prices.

GST Tax slab

The 28% GST tax rate on rubber products is an additional factor that has pushed up tyre prices. Tyres, other rubber, and automobile products are subject to an extra 28% GST tax in India, which is high when compared to other GST slab rates. Due to this, tyres are more expensive for end users.


Recently Competition Commission of India (CCI) imposed penalties on the tyre companies. These penalties pertain to allegations of cartelization against the tyre manufacturers. However, most of the penalties imposed by CCI have been disputed by the tyre companies and they are confident about this factor not having a very significant impact on their financial numbers.

The increasing tyre prices affect not only the consumer’s pocket but also the automobile industry and transportation industry as well, as the tyre is the main ingredient of transportation of goods. Increase in prices may lead to a decrease in the sales of vehicles as people may avoid buying new vehicles due to the high cost of tyres. Additionally, it will also lead to people postponing the replacement of their old tyres, which can compromise their safety on the roads.

In conclusion, the increase in tyre prices in India is a concern for many people. The pandemic, the rising cost of materials and the high GST tax rate have all contributed to the increase in prices. This affects consumers who now have to pay more for their tyres. Possible solutions to this problem could be finding other materials to make tyres with, or asking for the GST tax on tyres to be lowered. The government could also give incentives for tyre companies to set up factories in India, which would reduce the need for imports and lower prices for consumers. All the people involved must work together to find a solution and ensure that tyres are affordable for everyone.

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