Karnataka's Rubber Industry Faces Imminent Collapse
Thousands of rubber growers in Karnataka are struggling for survival as the government continues to deny them essential benefits by not recognizing rubber as a horticulture crop. This urgent appeal came from Vigneshwara Varmudy, a retired economics professor, during his keynote address at the Rubber Growers Convention held in Ujire on Saturday.
Import Crisis Threatens Local Growers
The challenges confronting Karnataka's rubber cultivators have reached a critical stage according to Varmudy. While market prices remain highly unstable, production costs continue to escalate steadily. The situation has been severely worsened by uncontrolled imports of natural and compounded rubber through various international trade agreements.
India imported 3.8 lakh tonnes of natural rubber and 1.1 lakh tonnes of compounded rubber from ASEAN countries during 2023-24. The import trend continued strongly in the April-November period of 2024-25, with 3 lakh tonnes of natural rubber and 1 lakh tonnes of compounded rubber entering the country. Varmudy revealed that approximately 73% of India's total rubber imports originate from ASEAN and SAARC nations.
Duty Disparity Creates Unfair Competition
The duty structure presents a significant problem for domestic growers. While natural rubber attracts 25% import duty and latex up to 70%, compounded rubber often enters India with minimal duties ranging from 0-5%. This substantial duty difference creates price depression in the Indian market, making it impossible for local growers to compete effectively.
Varmudy explained that production costs in ASEAN countries are substantially lower than in India, prompting traders to prefer cheaper imports. This preference for imported rubber leaves Indian growers unable to sell their produce at sustainable prices. The economist emphasized the immediate need for government intervention to regulate imports and impose appropriate duties on compounded rubber.
Comprehensive Solution Package Proposed
The retired professor outlined several critical measures needed to rescue Karnataka's rubber sector. He demanded the formation of a high-level committee to study and protect the state's rubber industry. Additionally, he called for the introduction of a minimum support price (MSP), enhanced subsidies for growers, comprehensive crop insurance coverage, and establishment of a price stabilization fund.
Varmudy issued a stark warning that rubber cultivation in Karnataka could face total collapse without immediate government intervention. He stressed that restricting low-tariff inflows, preventing stockpiling by importers, and reassessing free trade agreements that compromise domestic interests are essential steps to protect local growers.
The convention concluded with a strong consensus that official recognition of rubber as a horticulture crop would enable thousands of growers to access government scheme benefits that have long been denied to them, providing much-needed relief to the struggling sector.
