Tyre Manufacturers Seek Duty-Free Natural Rubber Imports Amid Rising Prices

The Automotive Tyre Manufacturers’ Association (ATMA) has formally requested the Union Commerce and Industry Ministry to allow temporary duty-free imports of natural rubber. The industry body has addressed a letter to Minister Piyush Goyal, seeking imports under a Tariff Rate Quota (TRQ) restricted strictly to the assessed gap between domestic demand and supply.

Domestic natural rubber prices have risen to ₹300 per kg, representing an increase of nearly 62 per cent compared to the November 2025 average of ₹186 per kg. According to ATMA, these severe supply constraints and surging procurement costs are challenging uninterrupted tyre production, even during the ongoing peak production season when manufacturers traditionally secure their domestic supplies.

Data indicates that India's natural rubber production continues to fall short of consumption. In FY26, domestic production stood at 9.05 lakh tonnes against a total consumption of 14.27 lakh tonnes, creating a deficit of nearly 37 per cent.

ATMA Chairman Arun Mammen noted that a temporary duty-free quota, limited strictly to the assessed shortfall, would assist manufacturers in maintaining production continuity while safeguarding the interests of domestic rubber growers. The proposed arrangement would remain active until market and supply conditions stabilize.

The price surge coincides with broader cost pressures facing tyre manufacturers. The industry is currently managing higher prices for synthetic rubber, carbon black, and other petroleum-based inputs. Furthermore, the ongoing crisis in West Asia has driven up international crude oil prices, logistics expenses, and freight costs, compounding the sector's financial burden.

India’s tyre sector accounts for an annual turnover of approximately ₹1 lakh crore, with exports exceeding ₹27,000 crore. Industry figures show that tyre exports grew by 16 per cent year-on-year in the first quarter of FY2026-27. ATMA has emphasized that timely access to competitively priced raw materials remains critical to sustaining domestic manufacturing operations and preserving India’s export competitiveness in the global market.

"The current supply deficit and soaring raw material costs highlight significant structural challenges for traditional manufacturing sectors in India. When key inputs like natural rubber face a 37 per cent deficit alongside rising global logistics expenses, profit margins for large-scale industries inevitably come under immense pressure. Implementing targeted policy measures, such as a calibrated Tariff Rate Quota, can offer temporary relief to maintain production stability, but long-term industry resilience will ultimately depend on improving domestic yield and supply chain diversification." — Dr. Shishir Gupta, Founder & CEO, StartupLanes