China’s WTO entry disrupts India’s rubber trade balance: RRII Study

Rubber growers in Kerala use plastic covering to protect latex from rain during the monsoon season. A scene from Kerala
| Photo Credit:
H.VIBHU

India’s external trade in rubber and rubber products has been upended after China’s WTO entry in 2001 with imports of finished goods outpacing exports leading to instability in the balance of trade, finds a study by Rubber Research Institute of India under the Rubber Board.

The study analysed the emerging trends in India’s external trade in rubber and rubber products over the 27-year period from 1996–97 to 2022–23, with a focus on the post-WTO scenario and China’s accession in 2001.

The study found that India’s long-standing trade surplus in rubber products faced disruptions post-2007–08, driven by a widening gap between imports and exports. Imports of rubber products grew at 13.4 per cent compared with 11.9 per cent of exports annually, thus emerging as the dominant force influencing trade balance shifts.

The study done by Joby Joseph, Tharian George K and Siju T, recommended a centralized monitoring agency and a techno-economic task force to address sector-wide challenges and to develop long-term strategies. It further suggested introducing discriminatory tariff rates based on NR content in compounded rubber as a corrective measure and consolidating organizational frameworks to ensure the sector’s sustainable growth.

China 5th largest supplier

China’s WTO entry marked an inflexion point with its share in India’s rubber imports rising sharply from under 1 per cent ($2.3 million) in 1999–2000 to 11.4% ($448.2 million) in 2023–24.

As the world’s top rubber exporter, China has become India’s fifth-largest supplier, with an annual growth rate exceeding 24 per cent.

In 2023, China’s total exports of rubber and rubber products amounted to $33.65 billion (over 16 per cent of the world exports), while India’s was $4.4 billion (2.1 per cent share).

The highlight of India’s trade with China has been an unfavourable balance of trade in the finished products segment during the 27 year period of study.

Raw materials segment showed a persistent trade deficit. While natural rubber imports grew at 20.44 per cent, it was only 10.71 per cent in the case of synthetic rubber.

The share of imports in total rubber consumption increased from 14.37 per cent in 1996-97 to 38.41 per cent in 2022-23. Import dependence increased as domestic rubber consumption shifted more towards SR.

For intermediate rubber products segment the balance of trade turned negative post-2015–16. Imports surged with a growth rate of 18.96 per cent growth, especially compounded rubber due to tariff benefits and demand.

As for the finished products, the segment retained a trade surplus, led by tires and other articles of vulcanized rubber exports. However, import growth (13.12 per cent) outpaced exports (11.74 per cent).

India’s captive domestic market facilitated by a large and wider rubber products manufacturing base since the mid-1930s and the resultant linkages among the constituent segments had been weakened by the trade policy initiatives implemented during the past three decades.

The study suggested preparing a reliable database on all the constituent segments from the raw material producers to the finished rubber products’ manufacturers for evolving perspective plans for the rubber sector.

Published on August 6, 2025