← External Forces: Trade, Geopolitics & Market Access (all topics)
US reciprocal tariff - tyres
What it is
In Aug 2025 the US raised tariffs on Indian goods including tyres from 25% to 50%, linked to India's Russian crude purchases. In Feb 2026 they were cut to 18% under an understanding covering that sourcing
The US is India's largest tyre export destination, worth Rs 4,082 cr in FY26
Impact on industries
- Cost share in the largest export market - the US fell from 17% to 15% of Indian tyre export value as competitiveness eroded
- Damage was contained: exports still hit a record Rs 27,312 cr in FY26, up 9%, recovering late in the year after tariffs fell to 18%
- Forced diversification - Germany, Italy, Brazil and France grew as destinations, and Indian tyres now reach over 170 countries
- Export economics were reset by a decision unrelated to the industry - the tariff was leverage on an energy-policy question
- The second-order effect matters as much - US tariffs on China raise the risk of Chinese output diverting into India