Government of India approves national policy on rubber

AIRIA has released the following statement: “As per the recent data released by Association of Natural Rubber Producing Countries (ANPRC) India was the fourth largest natural rubber producing country globally until the year 2012 and has now slipped down to the fifth spot in production below Vietnam and China. India’s position could have been much weaker in 2013, but a sharp fall in production in Malaysia saved India to be on the fifth spot. But still India is considered to be one of the key players in the global rubber business.

Indian rubber industry is looked upon as a Sunrise Sector in India. It is the second largest consumer of all rubbers (natural and synthetic) in the world. Exports of rubber products from India have been experiencing more than 20 % growth year on year for the last ten years.

In India per capita consumption of rubber are at 1.2 kg vs. almost 5.8 kg of China and 12 – 14 kg of developed nations. This gives an indication of future growth and opportunities. Growth in natural rubber consumption in India is at 3 – 4 % year on year and that for synthetic rubber at 15 – 20 % year on year since past 5 years. Majority of rubber products manufacturers belong to the MSME category who contribute 40 % to the GDP.

The rubber sector is one of the sectors contributing to highest employment across various sectors. 60 % of the rubber products are used in the automotive industry and with the growth witnessed by the Indian automotive industry for domestic as well exports, rubber industry too is poised for a similar growth. Evident by the double digit growth in exports year on year for last 10 years, Indian rubber industry has the proven capability of manufacturing the right quality of products which are accepted globally.

However, it is getting increasingly challenging for us in India, with more and more rubber producing nations focusing on value addition (manufacturing), rather than just exporting the raw material to India. There is a constant and ongoing engagement as well as competition across natural rubber producing countries and countries producing finished rubber products (tyres and general rubber goods). In years to come, this will impact global trade in natural rubber as well as rubber goods.

Despite being a sunrise sector, there are major challenges such as inverted duty structure, non-availability of natural rubber, high cost of capital for MSME sector, dearth of skilled man power, etc. which deters the industry from the growth it can easily achieve. The entire requirement of rubber-based industries for natural rubber, synthetic rubber, rayon and nylon tyre cord, steel cord, carbon black and rubber chemicals, etc can be met from indigenous sources. Rapid progress has to be made in the production of natural rubber.

In order to help India maintain its competitiveness in natural rubber production and that of finished rubber products there is a need to provide vision and direction for long term progress of this sector. There is a need to provide for a national policy for the rubber sector in India, failing which India may soon lose its standing in the world as the 2^nd and 5^th largest rubber consuming and producing nation respectively.

National Policy on Rubber will be one document which will provide the necessary vision and guide the industry for actions to be taken by various stake holders including the government, Rubber Board, AIRIA, ATMA, planters, dealers, manufacturers, importers, exporters, CAPEXIL etc. for the benefit of each segment resulting in propelling the entire sector to a growth rate it is capable of. Besides the government, Rubber Board, AIRIA & ATMA will be the primary bodies involved in providing inputs as per aspirations and expectations of their members which covers the entire sector.

AIRIA has been rigorously working on the matter related to National Policy on Rubber (NPoR), first proposed by our President Shri Niraj Thakkar in October 2013 and then many representations have been made to the Ministry Of Commerce and Industry, Department of Commerce, Department of Industrial Policy & Promotion, in consultation with Rubber Board and Automotive Tyre Manufacturers Association.

In November 2013 under Secretary to Ministry of Commerce and Industry Dept of Commerce agreed in principal that government constitute an expert committee to formulate National Policy on Rubber. Representatives from each segment of the entire value chain to be included as a part to form a National Policy on Rubber (NPoR). This committee can deliberate on the subject of NPoR for the progress and success of the rubber sector in India. AIRIA has formed a core committee for Drafting the NPoR under President and Shri R V Gandhi as the convener, the executive committee along with the help of other members like Shri M F Vohra, Shri Arvind Kapoor, Dr Joerg Strassburger , Shri Vinod Bhimrajka, Shri Virendra Rathod, Dr P Thavamani, Shri Yogen Lathia among many others.

Proposed vision

Envisioned as a Sunrise Sector with inherent multifaceted advantages, it shall be the policy of the government to:

 

• Make indian rubber industry most competent globally by ensuring synergy amongst the entire value chain.
• Make India one of the largest consumer and producer of raw materials and finished rubber products for domestic as well as exports.
• Create a brand India synonymous with rubber and rubber products transforming the rubber industry into a global hub for sourcing, similar to the Indian IT industry.

 

Designated mission

 

• To create an indigenous eco-system for the rubber sector in India to foster rubber and related products trade to tap the enormous potential that the sector offers.
• To help build state-of-the-art production capacities in upstream and downstream segments of rubber sector.
• To further develop the rubber and rubber product sectors in India for sustainable economic development and growth.
• To promote R & D in cutting edge technologies for the entire value chain.
• To create an atmosphere conducive to exports of rubber products and Raw Materials and continue the double digit growth for the next decade.
• To attract investments in rubber product and RM manufacturing and promote creation of jobs through all of the above.
• To increase per capita consumption of rubbers to match that of globally developed nations.
• To make the rubber industry technologically most advanced amongst the rubber consuming and rubber producing nations.
• To take a note of challenges and opportunities presented by the changing global environment particularly for NR production and sustenance.
• To liberalize controls and restrictions so that different segments of the rubber industry are enabled to perform in a greater globally competitive environment.
• Consider phasing out of quantitative restrictions and lowering tariff levels for an integration of the entire rubber sector and identify and have a focused approach to maximizing opportunities in new products and materials.
• Enable the industry to build a world class state of art manufacturing capabilities in conformity with global environmental standards.
• Sustain and strengthen knowledge, skills and capabilities of rubber technologists, planters, workers, supervisors and enrich human resource skills and for this purpose to revitalize the institutional structure.
• Make IT an integral part of the entire value chain thereby facilitating the industry to achieve international standards in terms of quality, design and productivity.

 

Thrust areas

 

• Technological upgradation
• Enhancement of productivity
• Quality consciousness
• Strengthening of raw material availability
• Focus on exports
• Skill development and ease of education
• Attracting investments for manufacture of natural as well as synthetic rubbers.
• Special focus on fundamental and applied R & D.
• Special impetus to the latex industry.

 

Important targets which needs to be addressed

 

• Achieve a revenue target and to create an employment.
• To achieve a share in trade of rubber products globally.
• To implement vigorously in a time bound manner a technological up-gradation scheme covering all segments of the industry, esp. the MSME sector.
• Launch a mission on latex (synthetic rubber and natural rubber) consumption for manufacturing products for global markets.
• Encourage the private sector and invite investments to set up world class, environment friendly, and integrated rubber parks in different parts of the country.
• Strengthen and encourage the plantation sector to produce value added and quality varieties for the Indian and global markets.
• Create centers of excellence to conduct R & D, testing etc, so as to remain in the forefront of technological advancement for the entire value chain. Review and revitalize the working of Indian Rubber Manufacturers Research Association (IRMRA) to focus on research and industry needs and to guide the industry for futuristic developments. Consider setting up of IRMRA’s in various regions and to consider their involvement to do a technical status study for the industry.

 

Sector specific initiatives: Inputs will be taken from each of the sectors for the requirements of their members/sector to create a vision for each of them. These inputs shall be integrated into initiatives needed for the entire value chain.

Proposal

• To address issues from a medium to long term perspective (5 – 10 years) and be reviewed every 2 years.
• To ensure that the provisions of the policy are mutually beneficial to all stakeholders involved.
• To define medium to long term objectives for the harmonious development of the rubber sector in India.
• To identify & address each issue/concern through multiple viewpoints and perspectives so as to cater to the interests of all stakeholders in the rubber sector and as a result encourage all round development of rubber sector in India.

The future looks bright if we address to NPoR. Ever increasing volumes are being produced. The rubber industry is expected to grow at over 8 % per annum this decade, as the per capita consumption of rubber is 1.2 kg against 14 kg in the developed world. AIRIA looks forward to inputs from the industry on the above as it takes unto itself to direct and provide opportunities for growth for this perceived sunrise sector.”