India’s retreading industry is reeling from the reduction in the Goods and Services Tax (GST) on new tyres, bringing it on par with tyre retreading services. The impact is widespread and is reflected in the industry’s overall performance in 2025.
GST Still Causing Issues for Retreaders
The 56th GST Council meeting decided to reduce the rate on new tyres for cars, bikes, and commercial vehicles from 28% to 18%, effective from 22 September 2025.
The rationalisation aligns the GST on new tyres with tyre retreading services, which also attracts an 18% GST rate. Instead of supporting the tyre retreading sector, especially in the post-EPR implementation phase, there is no respite for the struggling industry
The concerns of the retreading industry do not end here, as truck tyres received an even deeper reduction with GST dropping from 18% to 5%, impacting the OTR segment, which is regarded as offering better returns to retreaders.
Midas Treads Director Paulose Varughese agreed, “There was a challenge for hot-cure retreading because of changes in the GST. The GST rate on new truck tyres was reduced to 5%, while truck tyre retreading remains at 18%. This lopsided tax structure is a long-term challenge for the retreading of truck tyres, which is a big market in India.”
Tread rubber producers registered marginal growth, but their customers continue to struggle. Despite challenges in the domestic market, Midas registered 10% growth in volumes and is targeting a repeat performance in 2026 as it continues to expand into new overseas markets. “We have received a lot of interest from countries in Africa and Europe, and some new customers are also in the midst of conducting trials and hopefully will work with us soon.”
Another South India-based tread rubber producer, Surendra Reddy, Managing Director of Vamshi Rubber, believes that increasing radialisation is also impacting overall growth. Price competition and credit remain significant challenges for the retreading industry. Considering prevailing competitive market conditions, Vamshi introduces an economy tread rubber range in the domestic market. The Hyderabad-based tread rubber producer also grew by 10% in 2025 and aims to maintain that growth rate in 2026.
One major West Bengal retreader outlined struggles to maintain volumes of agricultural tyres; “We are experiencing a slowdown in our industry following the recent change in GST rates, particularly impacting the agricultural tyre retreading segment,” said the retreader on condition of anonymity. The prominent retreader has plans to start a second plant around Kolkata, but, post-GST rate cut, the expansion plans are shelved for the time being.
India’s largest retreader, Tyresoles, has also seen flat performance in its retreading operations. “While sales of renewed tyre selling under the brand Ecomiles grown, but retread volumes have declined, making the overall business flat,” concedes Karun Sanghi, Managing Director, Tyresoles. Commenting on when the retreading business recovers or improves, Sanghi hoped, “It will take 2-3 years and industry heads for further consolidation during the next couple of years.”
The man behind bringing the industry together by forming the Tyre Retreading Education Association informed that representation would be given to the concerned central and state departments on duty rationalisation for new tyres, but there was no response. According to him, “India’s retreading industry is too small and highly fragmented, regarded as its major weakness.”
