Presenting a paper at a seminar `Rubber Industry- Vision 2000' organised by All India Rubber Industries Association, S Samuel, managing director, Ceat Ltd. said human resource development must be focussed to increase productivity. Though India has labour that is cheap, it does not match the per capita productivity levels registered elsewhere in the world.

A quantum jump in productivity, is a must for revival and could be increased through training human resources and improved manufacturing techniques, he stated. India will have to improve on the technology front to survive the global competition. The industry which is in recession has witnessed prices of natural rubber at its lowest this year. The industry is facing recession mainly due to slump in auto tyres and components industry, the major consumers ofrubber.

It has also been adversely affected by liberalised imports of rubber as well as rubber products. The restricted imports of rubber has been switched over to open general licence (OGL). Customs duty which was 180 per cent in 1991 has been reduced to 40 per cent in a span of eight years. Further the permission to import second hand tyres has also caused a dent in the domestic market. India is rich in raw materials like natural rubber, reclaimed rubber and carbon black etc and the domestic market for such products is also large. Per capita consumption of rubber in India is 0.8 kg only against Japan's 16 kilogram. India is not only the fourth largest producer of natural rubber in the world it is also the fourth largest consumer of natural rubber in the world.

The rubber industry's growth prospect has been enlarged by vehicle industry. 60 per cent of total natural rubber production is consumed by tyre industry. During 1981-91 rubber industry's compounded annual growth rate was 8-9 per cent out of whichtyre accounted for 9 per cent and non-tyre 8 per cent.

Liberalisation has reversed the position of rubber in the country. Increased imports has made quality improvement and competitiveness call of the day. It has become necessary to develop export market as the sellers market has turned into buyers market due to heavy imports.

During 1991-95, natural rubber consumption which increased at the rate of 9 per cent per annum, has been restricted to 4-5 per cent from 1995 onwards till date.

The growth of rubber industry has been reduced to a meagre 1-2 per cent in 1998-99. This has affected the consumption of natural rubber adversely. India has also lost its competitive edge against SE Asia as their currencies have been devalued heavily. China and Korea export tyres at $ 57 while India exports it at $80 which has eroded the market share of India.

Since India has commenced production of radial tyres, there has been significant improvement in technology in the tyre industry while other rubber products yetneed to improve.

Ratio of natural and synthetic rubber consumption globally is 35:65 while in India it is 79:21 which suggests the huge potential in the industrial consumption. Government duties and taxes -central, state and local taxes are major deterrents to the industry. The end price of rubber product worth Rs 100 shoots up to Rs 149 after adding taxes while the same product in UK costs Rs 104.50. These makes Indian exports globally uncompetitive.

Simplification in taxes and multiple taxation needs to be reduced for the survival of the rubber industry. Single point taxation could give much needed relief, he stated.

He stated that artificial intervention of government should be eliminated. Raw material should be available at globally competitive rates and level playing field should be provided so that the industry could face the onslaught of the global competition. Growth rate of tyre industry in next five years is expected to be around 5-6 per cent. Phase of consolidation in next five years willprovide tremendous opportunity to grow for tyre industry. Indian rubber industry which comprises of 6000 manufacturing units producing rubber products employs around 3.50 lakh people out of which 22,000 are technically skilled personnel.