India's tyre industry in 2026: size, capacity and new plants

India’s tyre industry has an estimated annual turnover of about ₹1 lakh crore, according to the Automotive Tyre Manufacturers’ Association (ATMA), which represents the large makers. Crisil Ratings puts the sector’s revenue for 2025-26 at ₹1.36 lakh crore, with six leading companies accounting for about 85% of it. Whichever figure you use, the industry is busy: plants are running close to full, the leading makers plan to roughly double their investment over the next two years, and new car tyre capacity is arriving from companies that until recently made few or no car tyres in India.

Where the demand comes from

Replacement tyres are the biggest single market. Crisil said in 2025 that replacement demand accounts for about half of annual sales. The rest goes to car and vehicle makers as original equipment, and abroad: ATMA says exports now make up more than a quarter of the industry’s revenue, and they reached a record ₹27,312 crore in 2025-26.

Growth is slowing from a strong year. Crisil expects tyre volumes to rise 4 to 5% in 2026-27, after 7 to 8% the year before, with original equipment and replacement each growing 4 to 5% and exports 3 to 4%.

Plants running near full

Utilisation figures from the June 2026 quarter, reported by Business Standard, show how little spare room there is. JK Tyre said its Indian operations ran at about 95% of capacity, with truck and bus radials and two- and three-wheeler tyres almost fully used and passenger car radials at about 95%. CEAT said utilisation remained high across most categories. “Sustained demand and peak utilisation has pulled forward the next investment cycle,” said Poonam Upadhyay, a director at Crisil Ratings.

The investment pipeline

Crisil expects the six leading makers to invest nearly ₹18,000 crore over 2026-27 and 2027-28, almost twice what they spent in the previous two years. ATMA’s chairman, Arun Mammen, said in June that the industry had invested about ₹30,000 crore in new and expanded plants over the previous four to five years.

Company plans reported in August include:

• CEAT: capital spending of ₹1,300 to 1,400 crore in 2026-27, plus a board-approved ₹1,205 crore project to add capacity for about 53,000 two-wheeler tyres a day.
• Apollo Tyres: more than ₹3,000 crore in 2026-27.
• JK Tyre: expansion projects worth ₹4,980 crore in passenger car and truck and bus radials, expected to raise its capacity by about 24%.

New car tyre capacity from new directions

The most visible change for car owners is where premium car tyres are made. Michelin began commercial production of passenger car tyres at its plant near Chennai in September 2025, and in August 2026 launched the Primacy 5, its first car tyre made in India. The plant’s combined capacity for truck, bus and car tyres is about 54,000 tonnes, Michelin said, and it plans to add more car tyre lines through 2027.

Yokohama is raising its annual Indian passenger car tyre capacity from 2.8 million to 4.5 million units, with the extra capacity at its Visakhapatnam site, under an investment announced in 2023.

And on 22 October 2026, Balkrishna Industries, best known for off-highway tyres, told the stock exchanges it had signed a framework agreement with Pirelli for a proposed 50:50 joint venture to build and run a new plant in India making passenger car tyres under both companies’ brands. The joint venture is due to be incorporated by 31 December 2030, subject to conditions. In the meantime, Balkrishna will make Pirelli-branded car tyres at its car tyre plant in Bhuj, Gujarat, under a separate offtake agreement.

What it means for car owners

More of the premium car tyres sold in India will be made here, by more companies. That will not by itself bring prices down: makers are also dealing with sharply higher raw material costs, and have been raising replacement prices through 2026. For what is on sale now, our brand guides cover the makers’ ranges and our tyre size pages show who sells each size, and our guide to choosing the best tyres for your car helps narrow the field.