India’s rubber industry seeks incentives, FTAs to offset impact of 50% US tariffs

AIRIA President Sashi Singh told CNBC-TV18 that the industry has sought export incentives, extra duty drawbacks, and a push for free trade agreements on the lines of the recent UK deal. “The government should also focus on domestic development in infrastructure and defence so that the trade surplus can be gated through other industries,” Singh said.

The proposed US tariff of 50% on Indian rubber products—25% as duty and 25% as penalty—is expected to hit the sector hard. Singh pointed out that India exports rubber goods worth around ₹7,500 crore to the US annually while importing ₹2,200 crore, creating a trade surplus of ₹5,000–₹5,200 crore. “This is going to be a significant problem for the rubber industry,” he warned.

Beyond the US, Singh said Indian players should diversify exports to European markets where demand is higher, while also strengthening domestic sales. He noted that demand within India is already on an upward trend, supported by a strong automotive sector, with tyres for passenger cars, trucks, and buses largely outside the high-tariff bracket, facing only a 5% duty.

India, however, continues to face a production shortfall of about 5.5 lakh tonnes of rubber, despite progress in north-eastern states such as Tripura and Meghalaya.

On pricing, Singh expects stability in the near term, with rates hovering around ₹200 per kg, fluctuating within a range of plus or minus 4–5%.