India’s rubber trade balance shifted dramatically after China joined the World Trade Organization (WTO) in December 2001, according to a new study by the Rubber Research Institute of India.
The researchers, Dr. Joby Joseph, Dr. Tharian George and Dr.Siju, found that what was once a steady rubber export surplus turned into a growing deficit, largely driven by structural changes in trade after China’s entry into the global body.
The disruption, they argue, wasn’t just economic — it altered the entire sourcing logic of global rubber consumption, putting India, and by extension Kerala, at a long-term disadvantage.
While rubber cultivation spans several Indian states, Kerala remains the nerve centre — home to the largest rubber-growing community and hundreds of small and medium processing units. The shift in India’s trade position has hit Kerala hard. The study points out that Kerala’s natural rubber-based manufacturing sector--including tyre, glove and footwear industries--faced increasing pressure as cheaper imports from Southeast Asia flooded the market.
India’s favourable trade balance, which has lasted for nearly 50 years, has faced growing uncertainty since 2007–08 because of several factors, including China’s entry into the Indian market. To keep this trade advantage, the study recommended, India needs to prepare well by creating a reliable database and carrying out a techno-economic study of the challenges and opportunities in the three key sectors of tyre, glove and footwear industries
Between 1995 and 2002, India maintained a favourable rubber trade balance. But by 2003, the tide turned. The study notes that China’s massive demand started pulling rubber exports from other nations, leaving India more reliant on imports. By 2020, India’s rubber import volumes had nearly tripled compared to the pre-WTO era, while exports remained stagnant.
The once comfortable self-reliance on natural rubber slowly gave way to rising dependence — an unsettling trend for an agrarian economy like Kerala’s.
Researchers say the damage wasn’t caused by China alone. India’s policy shift to a zero-duty import regime under ASEAN and FTA frameworks made it easier for manufacturers to look abroad for cheaper raw material. The result? Small rubber growers, especially in Kerala, saw their margins squeezed, while processing units battled volatile supply chains and pricing pressures.
Global overproduction, weak international prices and low tariffs in the post-WTO period only made matters worse for domestic stakeholders.
The study recommends that India reconsider its trade and tariff strategy for natural rubber. It calls for a careful blend of protection and competitiveness, arguing that over-reliance on cheaper imports leaves the economy vulnerable.
Instead of focusing only on end-product manufacturing, the research urges the government to support backward integration — boosting India’s own rubber sourcing capacity and resilience.