According to Indian media reports on July 30, the Ministry of Agriculture & Farmers Welfare of India released a report on Tuesday showing that the price of natural rubber in the open market is determined based on supply and demand. International rubber prices also affect domestic rubber prices in India. The Indian government raised the import duty on dry rubber from the previous "20% or 30 rupees/kg, whichever is lower" to the bound rate of "25% or 30 rupees/kg, whichever is lower".
In January 2016, the entry ports for imported natural rubber were also restricted to Chennai and Nhava Siva Port. In addition, in the federal budget for 2023-24, the tariff rate on composite rubber was increased from 10% to 25%.
The Indian government, based on the recommendations of the Commission on Agricultural Costs and Prices (CACP), determined the minimum support price (MSP) for 22 statutory crops and the fair remuneration price (FRP) for sugarcane after taking into account the opinions of state governments and relevant central departments and other relevant factors.
The CACP also consults with all stakeholders and seeks comments on price and non-price proposals. Suggestions/representations are also received from time to time from state governments and various farmers' organizations on crop coverage under the MSP. However, inclusion of crops in the MSP framework depends on several factors, which include food security elements, relatively long shelf life, widespread cultivation, mass consumption items, etc.
The Indian Ministry of Commerce came out with the National Rubber Policy in March 2019, which includes new and replanting of rubber, support to growers, processing and marketing of natural rubber, labor shortage, growers' forum, foreign trade, Madhya Pradesh Integrated Strategy, research, training, manufacturing and export of rubber products, climate change issues and carbon market.
Natural rubber cannot be treated as an agricultural product. Although the cultivation of natural rubber can be considered an agricultural activity, the income from its cultivation may not be considered as agricultural income as it is used as raw material exclusively for industrial purposes.
However, in most existing free trade agreements (FTAs) and regional trade agreements (RTAs), natural rubber is included in the exclusion list to protect the interests of rubber growers.