The price of natural rubber is determined in the open market based on demand and supply. The International rubber prices also influence the domestic prices. The Government, with the objective to regulate the import of natural rubber, had increased the duty on import of dry rubber from “20% or Rs. 30 per kg whichever is lower” to bound rate of “25% or Rs. 30 per kg whichever is lower” w.e.f 30.4.2015. The Government had also reduced the period of utilization of imported dry rubber under advance licensing scheme from 18 months to 6 months in January 2015. The Port of entry for import of Natural Rubber had also been restricted to ports at Chennai and NhavaSheva in January 2016. Further, in the Union Budget 2023-24, the rate of custom duty on compound rubber was increased from 10% to 25%.

Government fixes Minimum Support Prices (MSP) for 22 mandated agricultural crops and Fair & Remunerative Price (FRP) for sugarcane on the basis of the recommendations of the Commission for Agricultural Costs & Prices (CACP), after considering the views of State Governments and Central Ministries / Departments concerned and other relevant factors. CACP also holds consultations with all the stakeholders and seeks suggestions for both price and non-price recommendations. Suggestions/ representations from State Governments and various farmer organizations are also received from time to time for the coverage of crops under MSP. The inclusion of crops under MSP framework is however, dependent on several factors which include essential for food security, relatively large shelf life, widely grown, item of mass consumption, among others.

The Department of Commerce had brought out the National Rubber Policy in March 2019, which inter alia covers new planting and replanting of rubber, support for growers, processing and marketing of natural rubber, labour shortage, grower forums, external trade, Centre-State integrated strategies, research, training, rubber product manufacturing and export, climate change concerns & carbon market.

Natural Rubber cannot be treated as an agricultural product. Though, the Natural Rubber cultivation may be treated as an agricultural activity, the income from its post-cultivation practices may not be treated as an agricultural income as it is exclusively used as a raw material for industrial purpose. However, in majority of existing Free Trade Agreements (FTAs) and Regional Trade Agreements (RTAs), Natural Rubber is included in exclusion lists to protect the interest of rubber growers.

This information was given by the Union Minister of State for Agriculture & Farmers’ Welfare Shri Ramnath Thakur in a written reply in Lok Sabha today.

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