Rubber industry asks for national policy on rubber

A National Policy on Rubber critical to optimize potential of sector

All India Rubber Industries Association (AIRIA), has urged the Government for formulating a National Policy on Rubber on the lines of National Policies for Petroleum, Textiles and Information Technology.

Niraj Thakkar, President AIRIA stated that Rubber is a sunrise industry in India with immense potential for growth if policy enablers are put in place. A National Policy on Rubber is critical to optimize the potential of the sector.

India is the world’s 4th largest producer and second largest consumer of Natural rubber; and the third largest consumer of all the rubbers put together. The consumption of synthetic rubber has been increasing at more than 20% year-on-year for the past five years.

However, with Vietnam, Indonesia, Sri Lanka and other NR producing countries aggressively vying for a stake in the global rubber product manufacturing, challenges for the Indian Rubber Industry are likely to go up if competitiveness is not enhanced, he added.

Vietnam recently stated that the country plans to increase the domestic consumption of NR from current 15 to 40% through a sharper focus on rubber products manufacturing.
 
“We have already requested the Chairman, Rubber Board for her suggestions on the National Rubber Policy with a view to give a direction to the industry’s efforts, Thakkar added.

AIRIA is already in dialogue with various agencies to draft a vision 2020/2025 document for the industry from the rubber product manufacturers’ perspective. Kerala alone contributed around 92% of India’s natural rubber production and new avenues of sourcing NR from the north east which looks very promising.

There has been a massive consolidation in the Indian Rubber Industry. Lot of older units have diversified beyond rubber and many more new plants have been set up to cater to the growing demand.

According to AIRIA, the rubber industry particularly the small scale manufacturers are suffering from various issues such as high input costs, inverted duty structure, cheap imports and ad hoc signing of Free Trade Agreements (FTAs].

The inverted duty structure has created an economic disadvantage for the domestic rubber manufacturers who have been threatened by cheaper imports from other countries. Therefore, the competitiveness of the domestic rubber manufacturers has been adversely affected.

 
AIRIA has already represented to the Commerce Secretary and Secretary Ministry of MSME urging them for a slew of measure to help the industry to overcome the challenging phase.

These measures include doing away with inverted duty structure on natural rubber and rubber latex, reduction in import duty on latex to 20% or Rs.12 / kg in line with NR duty, withdrawal of cess Rs 2 / kg on rubber or making it cenvatable, withdrawal of anti dumping duty on import of raw materials and to include Indian rubber products in the barter deals with any other country as and when considered.

AIRIA also urged to treat natural rubber at par with cotton, duty free import of 1 lakh tones of rubber and imports of rubber products from China should be subject to quality control.