Published on October 21, 2013

India is one of the largest producers of rubber in the world.  India is considered as one of the key players in the global rubber business. It has got huge variety in rubber products and rubber manufacturing units.  In the current scenario, the western countries are facing issues related to stagnancy in the rubber market. As a result all the attention related to this market has shifted towards Asian countries. This in turn has huge opportunity related to expansion for this industry.

Indian Rubber industry, although in better phase has got its own set of problems.  Quite a few issues associated with the industry are low domestic production, high import duty, volatility in the prices and lowered domestic production of natural rubber. The manufacturers are forced to import as domestic production is not sufficient to cater the needs of industry. At present the import duty is of around Rs. 20 per kg i.e. 12.5% of ruling price on natural number. On contrary the import duty is only 2.5-10 percent on finished rubber products. So the manufacturers do believe that instead of importing higher duty imposed rubber, it’s better to import finished product.

The second part of the story is visible in the domestic market. The Indian farmers are worried as cost of natural rubber has gone down for this fiscal year. As a result they are not getting enough share of profit. So they again request the government to increase the import duty on rubber.  Hike in duty is not acceptable to manufacturers. This in turn has increased the mismatch between the consumption and production. The scene is such that everything is in fixed situation. Different approaches need to be followed to improve the current situation. The first thing could be done is encourage the rubber production in the country. If production is increased then obviously demand for import will be in control.

The industry experts do believe that this industry needs support from government. Moreover the strong opinion is for deployment of new technology. The high production could be achieved only by increasing the usage of advanced tools, machinery and technology. This industry has got bright future and has got potential to contribute more towards the GDP of our country.