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Natural rubber deficit
What it is
India consumes substantially more natural rubber than it produces, running an annual shortfall of roughly 550,000 tonnes met through imports. Domestic output is concentrated in Kerala and the north-east, constrained by acreage, ageing plantations and labour
Natural rubber is the single largest input, and raw materials are close to half of a tyre maker's cost base
Impact on industries
- The dominant margin variable and entirely outside management control - natural rubber prices rose over 50% in 2024, compressing margins when pass-through proved difficult
- Import dependence layers currency risk on top of commodity risk, since synthetic rubber and speciality chemicals are also imported and priced in dollars
- The cycle reverses - falling natural rubber prices drove margin expansion in FY23, so input deflation flows straight through to operating profit
- Domestic plantation expansion programmes exist but yield after a seven-year gestation, so the deficit is a structural feature rather than a solvable problem