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Vehicles in India will soon come with star ratings, signifying how environment-friendly they are. The OEM's have braced to improve fuel economy of their existing & upcoming models. Tyre rolling resistance is one of the significant factors for vehicle fuel consumption. Improvement in Fuel consumption is always a prime focus area & to improve it all major factors are considered. In newly launched models, the low rolling resistance tyre development was initiated. The project is challenging as it requires not only achieving low rolling resistance in smaller size tyres (12″ to 13″) but also required to meet other critical vehicle performance parameters like ride, handling, NVH & durability. Effects of Tyre construction, rubber compound were analyzed to achieve lower rolling resistance and better durability of tyre. In addition, the factors affecting the rolling resistance of tyre like inflation pressure, load, and speed in smaller tyre sizes (12″ to 13″) are discussed in this paper.