Rubber Industry in India 2024-2028

Rubber Industry in India 2024-2028

The market comprises companies involved in the manufacturing of rubber and rubber-related products. Rubber products are used to produce tyres and retreading, rubber sealants, and all other rubber products that have domestic and industrial applications.

The rubber market is fragmented in terms of the size of market participants – small- and medium-size players. The players operating in the market are grappling with liquidity issues and rising costs of raw material costs, while also focusing on technical innovations to remain competitive.

The consumption of natural rubber in India is expected to rise at a compound annual growth rate of 5.61% between 2024 to 2028 and reach 1,789.76 thousand Tons in 2028. While the production of natural rubber in the country is expected to increase at a compound annual growth rate of 5.43% between 2024 to 2028.

The upsurge in consumption is propelled primarily by key sectors such as healthcare, automotive, footwear, and gloves.

In terms of production, the anticipation of reduced rainfall in 2024 may negatively impact India's rubber market, particularly in Kerala, a major production state that is vulnerable to adverse weather.

Market segmentation:

The consumption of natural rubber based on application is segmented into tyre and non-tyre. The non-tyre segment is expected to grow at a CAGR of 4.23% during the 2024-2028 period. The segment comprises consumption by the medium scale, small-scale, and tiny units producing high technology and sophisticated industrial products.

The non-tyre segment of the Indian rubber industry is labor-intensive and is dominated by MSMEs.

Market trends:

The rising demand for EVs in recent years has pushed the shift away from nitrile rubber that is used in Internal combustion engine (ICE) vehicles, towards ethylene propylene diene terpolymer (EPDM), silicone, thermoplastic elastomers (TPE), and thermoplastic vulcanizates (TPV).

Market drivers:

The increased use of rubber in various end use industries such as healthcare, automotive, and food is driving the market. The high demand for new automobiles and the need for replacement tyres for existing vehicles drive the requirement for rubber in the automotive industry.

Also, the expansion of healthcare facilities, coupled with the increasing focus on patient care and safety, is driving the demand for medical rubber and balloon products. However, the higher number of few medical procedures being conducted is the primary driver of the increasing need for rubber medical products.

Key deterrents to the growth of the market:

A skill Gap is prevalent across various job roles in different segments of the rubber industry. For instance, labor-intensive activities like tapping rubber trees require skilled workers. Paying for labor and the declining prices of rubber have made rubber cultivation economically difficult. The rising economic and infrastructure growth in the rubber industry has also resulted in increased demand for a highly qualified workforce to increase output, exports, and employment.