India is one of the largest producer and third largest consumer of natural rubber. India’s production of rubber is consistently growing at the rate of 6% per annum. Thanks to the India’s booming economy the rubber industry in the country has been growing significantly in strength and importance. India’s ever increasing demand for automobiles has been another reason for the growth of its rubber industry.

Rubber in India is grown in the following states:

Kanyakumari

Kerala

Karnataka

Goa

Andhra Pradesh

Orissa

NorthEastern states

Andaman and Nicobar Islands

Kerala is the largest rubber producing state in India accounting for 90% of India’s rubber output. 86% of the natural rubber growing areas are found in Kerala and Tamil Nadu.

Some salient points about the production and consumption of rubber in India are listed below:

It is the fifth largest consumer of natural rubber and synthetic rubber together in the world.

India is the world’s largest manufacturer of reclaim rubber.

Automotive tyre sector consumes over 50% of all kinds of rubber produced.

The bicycles tyres and tubes industry accounts for 15% of the consumption.

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Footwear industry consumes around 12% of the rubber produced

Belts and hoses consume 6% of the rubber produced

Camelback and latex products account for around 7% of the rubber consumed

Other products: 10%

Indian Rubber Industry

India produces around 7 lakh tonnes of rubber annually worth around Rs.3000 crore. 70% of the rubber produced in India is of a form called as the Ribbed Smoked Sheets (RSS). RSS is also imported and accounts for 45% of the total rubber imports. The Indian rubber industry has a turnover of Rs.12000 crores and around 52% of the rubber is consumed by the automobile industry. Although, India is one of the leading producers of rubber, its production is not enough to meet the internal demands of the country and hence needs to import rubber from other countries. India’s annual import of rubber is around 50,000 tonnes.

India has around 6000 manufacturing units of which 30 are large scale, 300 are medium scale and around 5600 falls in the small scale units. The various rubber products produced in India are natural rubber, carbon black, synthetic rubber, rubber chemicals which are used in industries such as engineering, aviation, aeronautics, pharmaceuticals, steel plants, railways, mines, textiles etc.

Factors affecting rubber price in India

Rubber prices in India are volatile and are affected by international factors along with local factors. Recently the rubber prices have been high. Factors which affect the rubber prices in India include:

International demand and supply

Like any commodity, the prices of rubber are affected by the demand and supply of natural rubber. Thailand, Malaysia and Indonesia being the largest producers of rubber play a key role in controlling the supply and in effect affecting the prices of natural rubber. Rubber is consumed in large quantities by countries such as USA, China and Japan. The rapid growth of the Chinese economy has led to a growth in demand for rubber. Due to this increased demand the international rubber prices have been steadily going upwards from 2001 onwards.