The rubber industry in the country, comprising the giant tyre companies to the tiny moulding units, is in the growth trajectory along with the national economy. It has the potential to be a global manufacturing hub, besides meeting the galloping domestic needs, on its strength of the raw material and manpower supply, say experts. ?However, there are areas of concern and constraints like high input costs and fiscal imbalances that deter such growth,? according to the All India Rubber Industries Association (AIRIA).
The production of natural rubber at around eight lakh tonne a year, is sufficient to meet the present demand. Prices match with international prices. But the growth rate of natural rubber production was not in tune with the growth in demand. This would stifle industry growth prospects, senior vice-president of the association TK Mukherjee told media persons.
?Considering the shortage, the industry pleads for duty free import of one lakh tonne of natural rubber through a designated agency, for distribution for domestic production,? he said.
Futures trade had been distorting prices, he added. The mandatory inspection and quality check by the Rubber Board served no purpose and it had only nuisance value and this should be done away with, he added.
The demand for synthetic rubber is around three lakh tonne. Domestic production is only about one lakh tonne. The balance has to be imported. ?Even then there is anti-dumping duty on synthetic rubber, making the Indian rubber industry non-competitive,? Mukkherjee said.
?Large-scale expansion of production base of synthetic rubber is unlikely. The country has to depend on imports to increase production of rubber products and reduced dependence on natural rubber. It is inevitable for the survival of the industry to reduce the import duty on synthetic rubber to 5%,? he said.
AIRIA, in association with the Confederation of Indian Industry (CII), is organising the ?India Rubber Expo 2009? in Kolkata next January. Conference, presentation of technical papers, and buyer-seller meets will be part of the expo, in which several international companies are expected to participate.