According to Shashi Singh, president of the All India Rubber Industries Association (AIRIA), “NR production in India has increased from 8.39 lakh tonne in 2022-23 to 8.57 lakh tonne in 2023-24. But there has also been a sharp rise in NR consumption which has gone from 13.5 lakh tonne in 2022-23 to 14.16 lakh tonne now so the deficit is still 5.5 lakh tonne.”
India has historically depended on NR imports due to insufficient domestic production. Singh highlighted, “NR imports face a 25% customs duty or INR 30 per kg whichever is higher but that’s just one part of the issue. The other is the availability of NR.”
He further explained current complications, saying, “Right now, China is stocking up and Bangladesh, which had become a good source of NR, is in turmoil.”
This scenario has caused a rapid increase in NR prices. Singh noted, “The price is currently at INR 247 per kg which is the highest in 15 years compared to INR 182 per kg as on April 1, 2024. So in four months, it has nearly doubled.”
Adding to the challenges, the availability of NR is uncertain due to heavy monsoons reducing tapping activities and declining imports. This situation particularly impacts industries that depend on NR. Currently, about 70% of NR is consumed by the tyre industry. The remaining 30% is utilized by non-tyre companies, predominantly small and micro enterprises, which are suffering the most.
“Take latex rubber used for making gloves and balloons which has a total 75% duty,” said Singh. “There is a shortage of this raw material but imported mattresses, balloons or surgical gloves attract a much lower duty of just 10% which encourages the import of these products rather than local manufacturing.”
To mitigate these issues, AIRIA and the Automotive Tyre Manufacturers Association (ATMA) have jointly approached the government with a statement on the input crisis. Efforts to boost local NR production are underway, with expansions beyond Kerala to include Tripura, now the second-largest producer.
Singh mentioned, “Earlier it was Kerala only but now Tripura is the second largest producer.”
He concluded, “We can search for more options to broadbase production.”
The situation underscores the need for a balanced approach in boosting domestic production while addressing import challenges to support local industries dependent on NR.
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