Tyre and rubber industries have urged the Centre to take urgent measures to stem the slide in domestic natural rubber production, which has been on a downward spiral for more than two years now.
The data for natural rubber production released by the Rubber Board recently showed a significant decline in production of 11 per cent in the first two months of the current financial year.
The latest drop in production comes on the heels of a 16 per cent drop in production in the fiscal 2014-15, and a 15 per cent drop in 2013-14.
“This is the third consecutive year of fall in natural rubber production. Domestic natural rubber availability has emerged as a major concern for rubber consuming industries. With the auto sector coming out of a long recession, the demand for rubber is expected to go up during the current fiscal. Tyre industry has put in large investments to meet the pick up in auto demand, but raw material concerns are likely to play a spoilsport in the ‘Make in India’ story as far as tyre sector is concerned,” said Rajiv Budhraja, director general of Automotive Tyre Manufacturers Association (ATMA).
Domestic consumption of natural rubber witnessed a four per cent rise in the fiscal 2014-15, and has held steady in the current fiscal. With this, the domestic production-consumption gap has been widening. In the previous fiscal, the gap was more than 360,000 tonne. According to the industry, the gap is likely to increase further in the current fiscal.
Mohinder Gupta, president of All India Rubber Industries Association (AIRIA) said there was no improvement in the sector.
He said that production had been falling despite an increase in rubber import duties. The small scale rubber sector had been caught in the cross hairs of domestic shortage and high import duties, he said.
The Union government needs to take into consideration the plight of MSMEs, he added. He also urged the Centre to consider abolishing the five per cent purchase tax on natural rubber with immediate effect.
– Business Standard