The Indian rubber industry has been in a state of turmoil lately and now prices have crashed to an 8 year low as per market trends! This has also got Indian car companies worried.
Prime Minister Narendra Modi has recently assured producers of rubber that the Government will strive to offer greater protection for them. He has issued an assurance promising increases in import duties for rubber and also highlighted the crucial role of rubber products for the Make in India campaign. This assurance to put more shackles on imports comes at a vital time when rubber prices have crashed to an eight year low of INR 100 per kg. The domestic rubber industry has been facing stiff competition from Chinese rubber products which are significantly cheaper.
Prime Minister Narendra Modi made this assurance while speaking at a major BJP rally held in Kerala. Imports of rubber have fallen this year though owing to lower levels of demand from the Indian tyre industry which is a big consumer of the same. The government has also increased import duty to approximately 25%. Imports have gone down by 9% till November this year. According to rubber consuming industries, hefty import duties on raw materials in comparison with finished products is definitely hitting them hard. This has created demand for higher imports of Chinese bus and truck tyres. The domestic tyre industry is in turmoil as well and this may affect the automobile industry in the future.
The truck and bus segments have not witnessed good sales this year. This has led to curbing of production by tyre companies to the tune of 15-20%. This has automatically led to reduced consumption of rubber products and lower imports even with a reduction in global prices of rubber.