India’s CEAT said on Friday it will increase tyremaking capacity at its export-focused Sri Lankan factories, at a time when New Delhi faces a sharply higher U.S. tariff rate compared with Colombo.
CEAT’s local unit in the island nation signed a pact with the Board of Investment of Sri Lanka to invest $171 million in focusing on export-led production of tyres and construction equipment tracks, the company said.
The tyremaker owns two factories in Sri Lanka - at Midigama and Kotugoda locations - following its $225 million Camso deal with French peer Michelin last year.
About 90% of Camso’s revenue comes from North America and Europe, brokerage Emkay Research had said in a December note. CEAT’s move comes as exports from India face higher U.S. tariffs than those from Sri Lanka.
Earlier this month, U.S. President Donald Trump doubled tariffs on Indian goods to 50%, among the highest levied on any U.S. trading partner. In comparison, Sri Lankan products have been hit with a 20% levy.
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