Govt hikes financial assistance for rubber sector by 23% to ₹708.69 cr for 2 years

The government has hiked the financial assistance for the rubber sector by 23% to ₹708.69 crore, from ₹576.41 crore, for FY25 and FY26 under the sustainable and inclusive development of the natural rubber sector, the ministry of commerce said on Monday. The move is likely to boost the production of natural rubber in the country and reduce import dependency, especially from China, Vietnam, Malaysia and Indonesia.

At present, natural rubber attracts import duties of 25% or ₹30 per kg, whereas the customs duty is 10%. Latex, which is made from natural rubber, attracts 70% import duty.

According to the commerce ministry, to boost rubber production, planting of rubber will be undertaken in 12,000 hectare (ha) in traditional areas during 2024-25 and 2025-26 with an outlay of ₹43.50 crore. For this, the rate of assistance has been increased to ₹40,000 per ha from the earlier ₹25,000 per ha. "This will help to cover the increased cost of production as well as provide additional incentives to growers for planting rubber. 3,752 ha will be brought under rubber cultivation in non-traditional regions with an outlay of ₹18.76 crore during the same period," says the ministry.

"Planting materials worth ₹50,000 per ha will be supplied by the Rubber Board. This will be over and above the plantation being carried out under the INROAD project in the North East. Planting assistance at ₹2,00,000 per ha will be provided for SC growers in non-traditional regions. Sponsored nurseries will be promoted by the Board in non-traditional areas for generating good quality planting material (new component). Assistance will be provided at ₹2,50,000 to 20 such nurseries," the ministry adds.

Notably, in order to boost natural rubber production, the government is also providing support to 250 rubber producer societies (RPS) for the next two years, by providing assistance of ₹5,000 from ₹3,000 in non-traditional or North East regions. At present, the country has over one lakh rubber producer societies. "The mobilization of rubber growers into Rubber Producers Societies will help in improving price realization for the rubber produced by the growers," says the ministry.

Moreover, the government is assisting up to ₹40,000 per RPS for latex collection. For farm mechanization, RPSs will be supported for purchasing sprayers/ dusters. Support up to ₹30,000 per RPS will be provided to 180 RPSs, according to the ministry.

To fund rubber research, an outlay of ₹29.00 crore has been provided for the next two years. This will aim at developing rubber clones suitable for different agro-climatic regions of the country to expand rubber cultivation to new areas to meet the rising demand in the country.

The development comes as the industry leaders including the tyre industry anticipate a reduction in import duties on rubber. Harinder Singh, MD & CEO, Yokohama India, a tyre manufacturer had earlier said that adjusting duties is vital for cost competitiveness. "India faces challenges in rubber production, with high duties on natural rubber. Adjusting duty rates is vital for cost competitiveness. Rising raw material costs and reliance on imports impact profits. Encouraging research, local sourcing under 'Make in India,' and adjusting duty structures will boost global competitiveness and sector resilience," Singh said.