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Multiwalled Carbon nanotubes (MWCNTs) were covalently functionalized by H 2 SO 4 /HNO 3 treatment to produce Carboxylated Multiwalled Carbon nanotubes (MWCNTR). Presence of carboxyl moieties on MWCNT were confirmed by Raman spectroscopy, X-ray photoelectron spectroscopy (XPS), Fourier transform infrared spectroscopy (FTIR) and Thermo gravimetric analysis (TGA). These hydrophilic polar groups helped in getting stable aqueous dispersions of nanotubes. High performance composite with good mechanical and electrical properties was prepared by ultrasonication assisted mixing of aqueous dispersions of MWCNTR with natural rubber (NR) latex followed by film casting and curing. A segregated network of nanotubes was formed along the boundary of latex spheres even at low concentration which is evident from very low percolation threshold (0.086 vol%), high conductivity and dielectric constant. The network formation was confirmed by TEM and supported by strain sweep studies. The tensile strength increased by 61%, tensile modulus by 75% and tear strength by 59% by the addition of 0.5 parts per hundred rubber (phr) MWCNTR. The inclusion of 1.0 phr MWCNTR in the NR matrix increased the dielectric constant from 4.7 for pure NR to 918 at 100 Hz. The AC conductivity reached a value of 10 −4 S/m for the nanocomposite. This nanoscale, flexible, reinforced natural rubber based composites with high dielectric constant and conductivity could find application as electromagnetic wave absorbers in the low frequency region.