Associations make a presentation to Rubber Board on Plan suggestions
Associations fear an increase in import of finished products
Seek duty-free import of 2 lakh tonnes of rubber in 2011-12
KOCHI: Two associations of rubber-consuming industries have asked for increasing the production of natural rubber in the country to meet the growing demand for value-added products domestically. Otherwise, the import of such products will go up, they say.
Making a presentation to the Rubber Board here on Monday on their suggestions to be included in the 12th Five Year Plan proposals on the rubber sector, the All-India Rubber Industries' Association (AIRIA) and the Automotive Tyre Manufacturers' Association (ATMA) said that taking a cue from China, the government should make urgent policy interventions to ensure timely availability of competitively priced rubber to the industries.
“There is a growing deficit between domestic production and consumption of rubber. Rubber import is, therefore, inevitable; or else, import of finished products will take place, denying the opportunity of value-addition within the country,” Vinod Simon, AIRIA president, said after the presentation.
“In the past five years, the international scene has undergone a sea change. India stands at the cusp of opportunity to emerge as a low-cost producer of rubber products, both tyre and non-tyre. There is enough domestic demand to be catered to. However, the domestic natural-rubber deficit and the expensive imports have been inhibiting the full blossoming of the rubber industry in the country,” he said.
Two-pronged strategy
“A two-pronged strategy needs to be adopted to bridge the growing deficit between domestic production and consumption. The domestic production needs to be enhanced by taking up replanting as a top priority and undertaking major planting initiatives in non-traditional areas. However, enhancing natural-rubber production being a long-drawn-out affair, duty-free imports to the extent of domestic deficit need to be allowed every year,” Rajiv Budhraja, director-general, ATMA, said.
In the past four financial years, the production of natural rubber has increased by only 1 per cent, while the consumption has increased by more than 15 per cent. In the current financial year, new capacities and major expansions undertaken by tyre companies to cater to the booming automobile industry will lead to an increase in consumption by 1.5 lakh tonnes. The industry has, therefore, reiterated its demand for a duty-free import of 2 lakh tonnes during the current financial year, he said. “In view of the widening gap between natural-rubber supply and demand, coupled with growth in tyre demand, a rise in volume of imports of finished products is likely, notwithstanding the adequate domestic capacity. As a result, value-addition from natural rubber to finished products, particularly tyres, will take place outside the country, especially in China, which has ensured adequate and timely availability of natural rubber to its industry through timely interventions, including acquisition of land outside the country,” Mr. Budhraja said.
The Rubber Board has projected an increase in consumption by only 40,000 tonnes during the current financial year. Accordingly, the gap between production and consumption has been put at 75,000 tonnes, which is at wide variance with industry estimates based on actual capacity expansion. The conservative consumption estimates by the board could impact the desired policy-making for the rubber sector, he said.
Mr. Simon emphasised the need for appointing a development commissioner, similar to those in the jute and the textile sectors. He said the consumption of natural rubber by the non-tyre sector had gradually declined to 33 per cent. Even the absolute consumption by the sector had recorded a decline, which was worrying since India was on a major growth curve. The office of the development commissioner should oversee the development of the rubber industries, particularly small and medium enterprises, which had borne the brunt of an unprecedented increase in the rubber price and were turning unviable.
(Source: http://www.hindu.com/2011/05/15/stories/2011051557801700.htm)
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