In the US trade war, Indian bandmakers can cause collateral damage

Copyright © HT Digital Streams Limit all rights reserved. Operate Ayaan Kartik 4 min Read 09 Apr 2025, 03:26 PM is the US laid out for about a fifth of the nearly $ 3 billion export by Indian tire manufacturers in 2023-24. (Pixabay) Summary of Indian tires and other auto parts manufacturers were saved additional US rates above the 25% charge on April 2, imposed on the global car sector a week earlier. But the increasing global trade war brings fresh tension. Indian ties exporters who have had a fierce competition in international markets after the US unleashed higher tariffs on nearly 100 countries has another factor to join: the increasing trade war between the US and China. US President Donald Trump’s administration on Wednesday increased its rates on Chinese imports in the country to 104%, in retaliation for China who decided to counter US reciprocal rates with its own. China exported rubber tires worth nearly $ 1 billion to the US last year, which is the largest rubber band importer. While the US is an important market for Indian tire manufacturers, which make up about a fifth of their nearly $ 3 billion exports in 2023-24, Europe and Latin America are also the most important destinations. Industry experts believe Indian businesses will have greater competition in these markets than China and other countries affected by Trump’s rates decide to deduce a part of their tire exports from the US to other countries. “With the imposition of US rates, the supply chain can be disrupted, along with the price increase for consumers in the US,” said Shefali Joshi, senior analyst, India ratings and research. “The Indian businesses may be looking for the establishment of manufacturing facilities in the US to address the challenge.” While Ceat Ltd and Apollo Tires Ltd earned more than 10% of their revenue from the export in FY24, international sales were nearly three-fourths of the top line of Balkrishna Industries Ltd. India’s biggest tire player, MrF Ltd, earns about 8% of its export revenue. The companies did not immediately respond to Mint’s inquiries. “With the US tariff setup, exports of other countries, especially China, are likely to be redirected to other geographical areas such as Latin America and Europe, which are also the most important areas for Indian exports. This is likely to increase competition for Indian players in these countries,” Joshi added. Dashed Hopes Anuj Sethi, senior director at Crisil Ratings, marked another worrying factor for Indian bandmakers. “The overall demand for car sales in the US is also likely to see a slowdown due to rising costs of rates imposed on cars, as well as components, which will also affect the demand for the band players.” On March 26, Trump announced a 25% tariff on all cars and components manufactured outside the US. Domestic car companies, including tire manufacturers, were saved additional charges on April 2 when the US announced 26% of reciprocal rates on Indian goods. While India’s exports to the US in FY24 amounted to only $ 8.9 million, the country sent almost a third of its total exports of car parts of $ 21 billion to the US. Ceat’s share price has fallen by almost 8% since the reciprocal rates were announced on April 2, while Balakrishna Industries drops an almost 9% in its share value. Apollo Tires lost more than 5% and MRF about 2%. The BSE car index fell by 5% in the same period. Ceat, who recently purchased the Canadian tire mark Camso’s outdoor-high-speed tire industry for $ 225 million to expand its global footprint, was very good about the US market. “The US will become a big market for us within the next two years, with the leading tires that have the lead in the foreground, and now truck bus radios, and eventually passenger car radials; it is currently not very high,” said Arnab Bannerjee, Ceat’s managing director and CEO, during the company’s earnings calls. Even before the current unrest in global markets, India’s tire industry has attracted additional investments from international players. In November, Bridgestone India, a subsidiary of Japanese tire manufacturer Bridgestone Corp., announced an investment of $ 85 million to expand its manufacturing capacity in Pune and Indore. The world’s largest tire manufacturer earned about 44% of its revenue from the Americas in 2023, and about 2% from India. “Our global teams judge the impact of the Trump administration movements,” says Rajarshi Moitra, executive director of sales and marketing at Bridgestone India. “Long before trade uncertainty, we have already mentioned India as a growth Island and we will continue to invest here.” Bridgestone expects India’s segment to the market to grow 6-8% over the next five years, despite the uncertainty in the global markets. Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More topics #china rates #tariff hike #auto #mrf #balkrishna industries #apollo tires #ceat coin specials