Punjab rubber units hit by rising prices and competition

A few years back, the state had 400-450 rubber-based units, most of them in the SME sector. Jalandhar was famous for its chappal industry. The city now has just 50 units.

Rubber prices are escalating with RSS 4 ruling at Rs 126 per kg at Kottayam in Kerala and Rs 136 per kg in Delhi. During the last year, raw rubber prices have increased from Rs 90 per kg to Rs 136 per kg in Delhi. Sources said there was an acute shortage of natural rubber in Kerala, the only state producing rubber in the country, due to growing demand.

Prices of other inputs like chemicals escalated by 35 per cent in the past one year. Export of natural raw rubber had further aggravated the situation, sources added.

Mukand Rai Gupta, chairman, Jalandhar Rubber Goods Manufacturer's Association, said, "Our input cost pushed up significantly in the recent past compared with our counterparts located in tax-free zone and closer to the raw material centre. Unable to survive in the domestic market, where our product is dearer as compared to the competitors, many of the units in Jalandhar have closed down. We pay 27.5 per cent tax (12.5 per cent sales tax and 15 per cent excise duty) on tread mill (used for resoling tyres) while a manufacturer sitting in the tax-free zone can avail tax exemptions."

Jalandhar was the only destination for finished rubber products in India. The mushrooming of units in every state posed tough competition, an industrialist said.

The Jalandhar rubber industry manufactures mainly rubber footwear