India's annual demand for rubber is about one million tonnes and is growing by 9-10 percent a year, while its ability to increase domestic supply is limited, said Y.S. Lathia, president of the All India Rubber Industries Association.
Currently India was unusual in that about 70 percent of its rubber use was natural rubber and 30 percent synthetic, the opposite of patterns in most other countries, he said.
"But I think it will change. There's not much open land to grow rubber trees, so the industry will have to make better clones of natural rubber trees (to increase yield) or import more or develop our own synthetic production," he said.
Natural rubber output in India was forecast at about 780,000 tonnes in the year through March 2006, industry officials said earlier.
Imports and exports of natural rubber would be balanced in the year at about 70,000 tonnes each, Lathia estimated, while 200,000 tonnes of synthetic rubber would be imported to supplement domestic production of 100,000 tonnes.
As India's domestic demand outpaced its domestic supply, manufacturers would be forced to compete with the giant neighbour to the north for imports.
China's tyre manufacturers produced 30 percent more tyres in 2004 than the year earlier, drawing down domestic rubber inventories and driving up global prices.
Lathia estimated natural rubber prices could stay strong through 2009 due to higher oil prices and a reduction of Southeast Asian trees when prices were low earlier this decade.