The India-UK Comprehensive Economic and Trade Agreement (CETA) is expected to significantly benefit India’s natural rubber and rubber products industry by providing tariff-free access to the UK market, potentially boosting exports and economic growth.
The agreement will be a fillip for natural rubber and rubber products segments and may open up new market opportunities for Indian exporters, said Binoy Kurian, Deputy Director (Marketing), Rubber Board.
The staging categories for tariff reductions, which determine the timeline for phasing out tariffs, are a key part of the CETA agreement. As rubber and rubber products come under staging category “A” which results in complete elimination of tariffs, it is expected that the export to the UK will enhance from $150.80 million in the coming years, he said.
Domestic supply shortage
Rubber Board is the export promotion council for the shipments of natural rubber (NR) HS 4001. Natural rubber exports are not actively promoted due to the deficit in the domestic market. However, NR exports are considered as the strategy to adjust temporary domestic demand-supply imbalances reflected in prolonged low prices in India as compared to international prices, he added.
Though India is not a major exporter of natural rubber, he said exporters can grab this opportunity and will be a boost to the domestic NR sector. It is expected that exporters of concentrated latex grade of rubber with HS 40011010, which is one of the major NR grades exported to the UK could take advantage of this opportunity which will in turn be advantageous to the Indian rubber growers. Moreover India is exporting a sizable volume of rubber products to the UK. India has exported $150.80 million worth rubber products to the UK, showing an increase of 11 per cent compared to the previous year.
Shashi Singh, President of All India Rubber Industries Association, said that the India-UK FTA could significantly benefit the rubber products trade by reducing tariffs and aligning standards. However, Indian manufacturers must prepare for stricter environmental and quality norms, while UK firms could gain a stronger foothold in India’s expanding industrial and automotive sectors.