The sidewall of a tyre is not always completely even; there are sometimes bumps, and indentations, which may require a more detailed inspection to decide the cause. Indentations are harmless and are not detrimental either to safety or to driving characteristics. They are only a visual condition. Indentations in the tyre are caused in the same way as if you were to tie a string around an inflated balloon or a soft fruit and then gently tighten the string. In the case of the tyre the string is invisible on the inside, hidden by the rubber. The sidewall of a tyre include embedded carcass cords which give the tyre its strength and are also vital for transferring steering and braking forces.
When a tyre is manufactured - or rather when constructing the carcass, to which the steel belt and the tread are then attached - there is always at least one overlap. It is this overlap which is sometimes visible as an indentation after the tyre is fitted and inflated.