Published on May 19, 2014

Domestic production of natural rubber has dropped for the month of April. This in turn augmented the domestic prices for rubber. On the other side import prices for rubber remained preferentially low. This price difference has attracted the rubber-intensive industry owners to import rubber from overseas market. According to Business Standard, the current trend indicates that there will be higher imports in the current fiscal year.

In a recent scenario the Indian government has agreed upon to implement a new Rubber policy. The policy consigns the rubber industry of India as a “Sunrise sector” and ensures to bring major improvements to India’s economy. The policy has got three major goals. First, to ensure that the Indian Rubber industry becomes the global leader by assuring synergy throughout the industry in terms of value chain. Secondly, the country becomes the biggest producer as well as the consumer of rubber in global market. Last but not the least, making sure that the Indian rubber industry also get mobilized and become a global sourcing hub, very similar to the Indian IT industry.

One of the biggest consumers of rubber is the tyre industry. According to the Automotive Tyre Manufacturers’ Association (ATMA), in the last few years the spread between the production and consumption of natural rubber has outstripped itself. Year over year consumption has been increasing leaving behind the production figures. Further the agreement signed with the neighboring countries has given rise to inverted duty structure. Basic custom duty on Tyre is 10% but as per the agreements the duty becomes still lower than the basic rate. So it’s high time for the policy makers to take stand and design such policies which are in favor countries economic growth and soothing for the domestic manufacturers as well as the associated industries.