[color=hsl(0,0%,0%)]Natural rubber, a critical raw material for tyre manufacturing, is in extremely tight supply even as the industry enters what is traditionally the peak tapping season. Prices are climbing steadily and are now inching closer to the Rs 200 per kg mark, raising fears of cost pressures and possible production disruptions if the situation persists.
[color=hsl(0,0%,0%)]For an industry that runs on continuous production cycles, this is more than a pricing issue, it is a supply-chain risk.
[color=hsl(0,0%,0%)]Why The Shortage Is Raising Eyebrows
[color=hsl(0,0%,0%)]What has unsettled tyre manufacturers is not just the shortage, but the timing of it. January typically sees maximum availability of natural rubber as tapping activity peaks. Yet, tyre makers say they are struggling to secure adequate supplies to keep plants running smoothly. According to the Automotive Tyre Manufacturers’ Association (ATMA), the tightness goes beyond what can be explained by seasonal or climatic factors alone.
[color=hsl(0,0%,0%)]While lower yields due to leaf fall disease and rising atmospheric temperatures in traditional rubber-growing regions are acknowledged, industry players believe the current crunch points to deeper structural and market-related issues.
[color=hsl(0,0%,0%)]One of the concerns being flagged is the possibility of hoarding by intermediaries, betting on further price increases. In a commodity market already under strain, such speculative behaviour can quickly amplify shortages and distort pricing.
[color=hsl(0,0%,0%)]Data vs Ground Reality: A Growing Mismatch
[color=hsl(0,0%,0%)]Perhaps the most striking aspect of ATMA’s concern is the sharp disconnect it sees between official data and on-ground realities.
[color=hsl(0,0%,0%)]Rubber Board figures suggest that natural rubber production rose by around 5 per cent between April and November 2025. But ATMA’s internal assessments indicate production may actually be about 8 per cent lower during the same period. Stock levels reported officially, too, do not seem to reflect what tyre makers are experiencing in the market.
[color=hsl(0,0%,0%)]This gap between data and availability has prompted ATMA to urge the Rubber Board to conduct an independent, reality-based assessment of production and stocks, an unusual step that underlines the seriousness of the issue.
[color=hsl(0,0%,0%)]For policymakers, this raises a larger question. Are current data collection mechanisms robust enough to guide supply-side decisions in real time?
[color=hsl(0,0%,0%)]Growth Investments At Risk
[color=hsl(0,0%,0%)]The timing of the supply crunch could not be worse. India’s tyre industry has invested heavily over the past few years to expand capacity, betting on rising demand from both original equipment manufacturers (OEMs) and the replacement market. With vehicle sales recovering and infrastructure activity picking up, tyres were expected to be a steady growth story.
[color=hsl(0,0%,0%)]Raw material constraints, however, threaten to derail that momentum. If supply tightness continues, tyre makers could be forced to cut production, delay expansion plans, or pass on higher costs, none of which bode well for the auto value chain.
[color=hsl(0,0%,0%)]Domestic Supply Still Falls Short
[color=hsl(0,0%,0%)]A structural challenge looms in the background: India still produces only about 60 per cent of the natural rubber it consumes.
[color=hsl(0,0%,0%)]According to Rubber Board estimates, nearly two lakh hectares of rubber plantations remain untapped. ATMA has called for urgent identification of these estates and steps to bring them under tapping to boost domestic availability.
[color=hsl(0,0%,0%)]For the long term, this highlights the need for a more coordinated approach, balancing farmer incentives, productivity improvements, and industry demand, to reduce dependence on volatile supply cycles.
[color=hsl(0,0%,0%)]Imports Back in Focus
[color=hsl(0,0%,0%)]In the immediate term, tyre makers are once again pushing for easier imports. ATMA has reiterated its long-standing demand for duty-free natural rubber imports to cover the domestic shortfall. It has also sought removal of restrictions that limit natural rubber imports to just two ports, arguing that broader port access would reduce logistics bottlenecks and improve supply to manufacturing hubs across the country.
[color=hsl(0,0%,0%)]This is a sensitive issue, given the need to protect rubber growers’ interests. But industry insiders argue that without calibrated imports, price spikes and shortages could hurt both manufacturers and end consumers.
[color=hsl(0,0%,0%)]A Policy Test Case
[color=hsl(0,0%,0%)]The natural rubber shortage is fast becoming a test case for how quickly regulators can respond to supply-chain stress in a critical industrial input.
[color=hsl(0,0%,0%)]ATMA has called for immediate intervention by the Rubber Board and the government to stabilise supplies, curb speculative practices, and ensure that both growers and rubber-based industries remain viable.
[color=hsl(0,0%,0%)]If left unresolved, the issue could ripple beyond tyres impacting vehicle costs, replacement demand, and even export competitiveness. For an industry already navigating input cost volatility, this is one crisis it can ill afford to ignore. |
