ATMA Urges Duty-Free Natural Rubber Imports as Prices Surge to ₹300 per kg

The Automotive Tyre Manufacturers’ Association (ATMA) has requested the Indian government to permit temporary duty-free imports of natural rubber under a Tariff Rate Quota (TRQ), citing critical supply shortages. This request arises as natural rubber prices have surged by 62% to ₹300 per kg, amidst inadequate domestic production which fails to meet the rising consumption needs. In FY26, India’s natural rubber production was only 9.05 lakh tonnes against a consumption of 14.27 lakh tonnes, resulting in a significant deficit of 37% that is exacerbated during the peak tapping season.

The implications of this situation for the common citizen and the market are considerable. Rising rubber prices not only impact tyre manufacturers but also translate into higher costs for consumers as these costs may be passed on through price increases for vehicles and vehicle components. Furthermore, the overall inflation in the automotive sector could dampen demand, affecting other sectors linked to manufacturing and sales. The request for duty-free imports aims to stabilize production and potentially prevent a sharp rise in prices, thus benefiting both manufacturers and consumers.

In the long term, the government and RBI must assess sustainable strategies to bolster domestic rubber production and address underlying supply chain vulnerabilities. Measures could include incentivizing local rubber production through subsidies or research into more resilient crop varieties. Additionally, if the duty-free imports under TRQ are granted, monitoring and ensuring that such measures do not unduly disadvantage local farmers will be crucial for balancing industry needs with domestic agricultural interests.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)