The Indian automotive sector is shifting gears from recovery to resilience. Moving past the initial post-pandemic rebound, industry leaders are now focused on long-term structural competitiveness and global integration. As the Union Budget 2026 approaches, the narrative is centred on policy continuity and cost predictability.
Manufacturers are urging the government to address the volatility in input costs, particularly for critical raw materials like natural rubber which remains a significant import dependency. Harinder Singh of Yokohama India and Sidhartha Khurana of STUDDS Accessories emphasize that while infrastructure spending has successfully primed demand, the next phase of growth requires specific interventions in duty structures and export facilitation. The expectation is for a budget that supports the industry’s transition towards premiumization and self-reliance, ensuring that domestic manufacturing translates effectively into global market leadership.
Harinder Singh, Managing Director and CEO of Yokohama India Pvt. Ltd., opined, “As we approach the Union Budget 2026–27, the tyre industry requires policy continuity that reinforces manufacturing competitiveness and enables scale. While sustained infrastructure investment and the structural shift toward SUVs and premium vehicles have improved demand visibility, input cost stability remains the sector’s most pressing challenge.Natural rubber volatility continues to impact margins significantly. With India importing a substantial portion of its natural rubber requirements due to limited domestic availability, duty rationalization on critical raw materials would meaningfully improve cost efficiency and strengthen the global competitiveness of Indian tyre manufacturers.
The passenger vehicle category is clearly premiumizing, with larger rim diameters and performance-oriented fitments gaining traction in OEM requirements. Yokohama India has proactively aligned with this trend by localizing higher-inch tyres and expanding capacity at our Visakhapatnam facility, allowing us to meet both OEM and replacement demand across price classes.
To establish India as a global manufacturing hub for premium tyres, the Budget must deliver on three critical fronts: continued infrastructure capital expenditure to support automotive demand, improved export facilitation measures such as duty drawbacks and logistics support, and stable raw material trade policies that provide cost predictability. These actions would immediately contribute to the Atmanirbhar Bharat agenda while enhancing India’s standing in global automotive supply chains.”
Sidhartha Khurana, Managing Director, STUDDS Accessories Ltd., had this to say. “As the auto industry continues to evolve, the Union Budget 2026 comes at a crucial time, especially after a strong recovery driven by GST 2.0 reforms that have improved compliance and strengthened supply chains. Sustained focus on infrastructure development, support for domestic manufacturing and skill upgradation will be key to maintaining growth momentum across the auto and auto ancillary sector as volumes rebound across segments. The industry is also looking for continuity, along with a renewed push towards localization, innovation and ease of operations to enhance global competitiveness. A forward-looking budget that supports manufacturing scale-up, road safety and policy stability will enable companies like ours to invest with confidence, create employment and contribute meaningfully to India’s journey as a global automotive manufacturing hub.”
