Kamal Ghorui
Hyderabad: India’s rubber industry has sought urgent govt intervention as global supply disruptions linked to the West Asia conflict have pushed up raw material and freight costs, threatening thousands of small manufacturers and exporters across the country.In a representation to the commerce ministry, the All-India Rubber Industries Association said SMEs are facing severe stress as prices of natural rubber, synthetic rubber and rubber chemicals have shot up amid shipping delays, insurance hikes and uncertainty in crude-linked inputs.
The industry body has urged the govt to ensure equitable raw material access for MSMEs, provide credit support, waive duties on certain synthetic rubbers, and speed up port clearances to protect jobs and export commitments. It has also urged the govt to facilitate alternative sourcing by granting temporary exemptions or easing imports from China and Southeast Asian countries.“The impact on the rubber industry is huge because all the raw materials we use to produce rubber components are oil-based, mainly carbon black, synthetic rubber oils. So anytime oil prices go up, everything goes up,” said Anay Gupta, president of the association.“At present there’s about 30% to 40% increase in raw material prices if we compare with before the war started,” Gupta said, adding that the sharpest increases have been seen in carbon black, synthetic rubber and processing oils, while natural rubber has also become costlier.“For natural rubber, increase is about 10% because though it’s not oil-based but demand-driven, about 40% of natural rubber used in India is being imported. Freight charges and insurance costs have gone up due to the conflict.”The association said shipping lines have imposed steep surcharges, worsening the burden on manufacturers. Gupta said, “Shipping lines have put $2,000 surcharge on 20ft containers and $3,000 on 40ft containers. Insurance costs also have increased and freight charges have nearly doubled.”He said India’s dependence on imports has made the sector especially vulnerable. Gupta said India produces only about 60% of the natural rubber it consumes, while synthetic rubber imports account for a very large share of domestic demand.Industry data shows India consumed 8,56,900 metric tonnes of synthetic rubber in FY25, of which 4,13,627 metric tonnes, or nearly 48%, was imported.The impact of the conflict is expected to be significant for export-oriented segments such as automotive components, belting, footwear and sports goods. “Anybody and everybody who uses rubber and these inputs is affected badly,” Gupta said.In Telangana, the rubber industry largely comprises around 800 units, mostly MSMEs, with an annual turnover of around Rs 3,000 crore, contributing 0.5% to 1% of manufacturing output and less than 1% of GSDP.Clusters around Hyderabad and Mahabubnagar produce hoses, tubes, sheets and profiles, while reclaimed rubber units process waste tyres.
