India's tyre makers seek duty-free rubber quota as prices hit ₹300/kg

The tyre industry body wants a temporary tariff-rate quota on natural rubber imports, capped at the domestic demand gap, to ease costs at a record ₹300 per kg.

By Procupy News DeskPublished 6 Nov 2026, 8:00 PM IST3 min readSource: BusinessLine

In 60 words

India's Automotive Tyre Manufacturers' Association has asked Commerce Minister Piyush Goyal for temporary duty-free natural rubber imports under a tariff-rate quota, limited to the gap between domestic demand and supply. Domestic rubber is at ₹300 per kg, about 62% above the November 2025 average. The association says FY26 production of 9.05 lakh tonnes fell far short of consumption of 14.27 lakh tonnes.

Key points

ATMA wants a temporary duty-free quota on natural rubber imports, capped at the assessed demand-supply gap and kept until supply normalises¹.
Domestic natural rubber is at ₹300 per kg, nearly 62% above the November 2025 average of ₹186 per kg¹.
ATMA says FY26 production was 9.05 lakh tonnes against consumption of 14.27 lakh tonnes, a deficit of nearly 37%¹.
The government has already extended a cotton duty exemption to 31 December, and poultry groups want duty-free maize^2, 3.

India's Automotive Tyre Manufacturers' Association has asked the Commerce Ministry for temporary duty-free imports of natural rubber under a tariff-rate quota, or TRQ, with domestic prices at ₹300 per kg¹. In a letter to Commerce and Industry Minister Piyush Goyal, the industry body said the quota should be limited to the assessed gap between domestic demand and supply. It could stay in place until market and supply conditions normalise¹.

A TRQ sets a lower or zero duty on a fixed quantity of imports, with a higher rate applying above that quantity⁴.

Domestic natural rubber prices have touched ₹300 per kg, nearly 62% higher than the November 2025 average of ₹186, according to the association¹. BusinessLine reported on 3 November that the price had reached an all-time high of ₹300 per kg for the first time⁵.

ATMA said India produced 9.05 lakh tonnes of natural rubber in FY26 against consumption of 14.27 lakh tonnes, a deficit of nearly 37%¹. Supplies are falling short even during the peak tapping season. That is when tyre makers normally secure domestic rubber for their production schedules¹.

Cost pressure runs through the tyre chain

"A temporary duty-free quota, limited to the assessed shortfall, would help manufacturers maintain production while protecting the interests of domestic rubber growers," said Arun Mammen, chairman of ATMA¹.

ATMA said tyre makers also face higher prices for synthetic rubber, carbon black and other petroleum-based inputs. The West Asia crisis has pushed up crude oil, freight and logistics costs, it said¹. The tyre industry has an annual turnover of about ₹1 lakh crore and exports of more than ₹27,000 crore. Tyre exports grew 16% year on year in the first quarter of FY2026-27¹.

Company results show the squeeze. JK Tyre plans to raise prices by another 4 to 5% in the October to December quarter, after increases of 5% in the first quarter and 7% in the second⁶. It said its raw material cost rose about 30% over the first six months of the financial year⁶.

Global tightness sits behind the domestic record

The record price is not only a duty story. The Rubber Board's deputy director for marketing, Binoy Kurian, attributed the rally to El Niño and to heavy rain that disrupted tapping in the second quarter⁵. He also cited higher Brent crude prices, which lifted synthetic rubber costs, and lower output in Southeast Asian producing countries⁵. The Association of Natural Rubber Producing Countries has projected 2026 global production of 15.039 million tonnes against consumption of 15.356 million tonnes⁵.

Domestic prices already trade above world levels. On 22 October, RSS-IV grade was ₹290 per kg in India, about ₹20 above international prices, with Bangkok at around ₹270 per kg⁷. Block rubber was ₹273 per kg in India against ₹245 internationally⁷. Imports of natural rubber and compound rubber have averaged around 75,000 tonnes a month⁷.

There are signs supply could respond. Traders said the rally could encourage farmers to resume tapping, particularly on trees that stayed untapped during a long stretch of low prices⁵. Growers expect northeast monsoon rain to support output, and Harish MV of Harnez Fin Analysis said rising seasonal supply and weak demand outside Asia may limit further gains⁷.

Relief requests are stacking up

The request fits a pattern of input-cost lobbying. The Finance Ministry extended the exemption from an 11% customs duty on cotton imports to 31 December from 31 October, after removing the duty from 1 June². Poultry associations have asked for duty-free imports of non-GMO maize³. The FY28 budget is expected to focus on trade facilitation and possible selective fixes to inverted duty structures, where inputs are taxed more than finished goods, according to sources⁸.

On the supply side, the Rubber Board has launched a platform to bring untapped plantations into tapping, part of an effort to raise output⁹. The Board is a statutory body under the Commerce Ministry and advises the government on rubber imports and exports¹⁰.

What is still open

ATMA's letter did not disclose the size of the quota it wants or how it would be allocated among tyre makers. BusinessLine's report did not include a response from the Commerce Ministry¹. Importers would also carry currency risk: the dollar stood at ₹94.48 on 5 November and has risen 5.1% against the rupee since the start of the year¹¹.

What this means for procurement teams

For buyers of tyres, rubber components and other rubber goods in India, this is a live landed-cost question. The industry body wants a fixed volume of natural rubber to enter free of customs duty, while the domestic price sits at a record ₹300 per kg¹. If the government grants a quota, the relief will depend on its size and on who receives the allocation. Neither has been disclosed¹.

Duty relief would address only part of the problem. Domestic RSS-IV already traded about ₹20 per kg above international prices on 22 October⁷, and global output is forecast to fall short of consumption in 2026⁵. More imports do not remove that tightness.

Procurement teams can act now. Check whether 2027 tyre and rubber-component contracts are indexed to domestic sheet rubber prices, and ask suppliers how they will treat a duty-free window¹. Qualify a second source on block rubber as well as sheet grades, because the two price differently⁷. Budget for currency too: the dollar stood at ₹94.48 on 5 November, up 5.1% against the rupee this year¹¹.

Watch the notification rather than the headline. Cotton shows how an exemption can be extended once granted², and a rubber quota would follow the same administrative route. Time negotiations to the decision and keep a fallback volume contracted in case the quota is refused.

Sources

1.BusinessLine, ATMA seeks duty-free natural rubber imports as prices hit ₹300 per kg, 6 November 2026. Accessed 6 November 2026.
2.BusinessLine, Centre extends duty exemption on cotton imports till Dec-end, 31 October 2026. Accessed 6 November 2026.
3.BusinessLine, Hit by feed costs, poultry industry seeks duty-free maize imports, 3 November 2026. Accessed 6 November 2026.
4.Wikipedia, Tariff-rate quota (Wikipedia), 17 July 2025. Accessed 6 November 2026.
5.BusinessLine, Natural rubber prices touch all-time high of ₹300 per kg, 3 November 2026. Accessed 6 November 2026.
6.The Economic Times, JK Tyre to hike prices by 4-5% in Q3 as raw material costs stay elevated, 23 October 2026. Accessed 6 November 2026.
7.BusinessLine, Natural rubber prices hit record high of ₹290 per kg on strong demand, tight supplies, 22 October 2026. Accessed 6 November 2026.
8.BusinessLine, Budget FY28: Govt eyes ease of trade over sweeping customs duty cuts, 3 November 2026. Accessed 6 November 2026.
9.BusinessLine, Rubber Board unveils INR Konnect to connect link, boost production, 28 October 2026. Accessed 6 November 2026.
10.Wikipedia, Rubber Board (Wikipedia), 26 April 2026. Accessed 6 November 2026.
11.European Central Bank reference rates, US dollar to Indian rupee (ECB reference rates), 5 November 2026. Accessed 6 November 2026.

How this story was made: the Procupy News Desk researched and wrote it with AI tools, working only from the sources listed above. Automated checks confirmed that every number and quote appears in those sources, and a separate AI fact-check compared the story with them before publication. Read our editorial policy. Spotted a mistake? Tell us and we will fix it.