Production-consumption Gap Leads to Distress in Rubber Sector

Two trade bodies have locked horns over the growth of natural rubber production in the country.

Published: 12th December 2015 04:47 AM  |   Last Updated: 12th December 2015 04:47 AM   |  A+A-

KOCHI: Two trade bodies have locked horns over the growth of natural rubber production in the country.

The All India Rubber Industries Association (AIRIA) on Friday challenged the United Planters’ Association of South India’s statement that rubber production has become uneconomical.

Quoting data from the Rubber Board, under the Ministry of Commerce & Industry, the AIRIA, said, as against the production-consumption gap of 2.55 lakh tonne between April and October, 2015, 2.52 lakh tonne of natural rubber has been imported.

“Natural Rubber imports are even less than domestic production-consumption gap. There are no  ‘unbridled imports’ as alleged by UPASI. Planters argue that imports are hurting the interests of growers. On the contrary, industry is at the receiving end of punitive duty structure. Ideally, import of natural rubber to the extent of domestic deficit should be at nil rates of duty. But the government levies a hefty 25 per cent import duty, which are much higher than on finished products, thus making the industry uncompetitive,” said Mohinder Gupta, President, AIRIA.

On Thursday, the UPASI said, there was a need to bridge the gap between consumption and production, but unbridled imports beyond the gap were causing harm to the domestic industry.


Reeling out numbers, UPASI said in FY15, imports comprised nearly 76% of the production. As on October 2015, growers were left with 66,000 tonne, which UPASI termed ‘insignificant’ considering there were 12 lakh NR growers. “It’s high-time the government steps in, to introduce necessary safeguards limiting rubber imports,” said N Dharmaraj, President, UPASI.

On the other hand, AIRIA countered that the government must take a holistic view on all stakeholder concerns. Merely curbing import of NR as a kneejerk reaction will be a recipe for disaster.

“Rubber prices in India continue to be 20-25 per cent higher than international prices. And yet the entire domestic production is getting consumed by the industry. Imports are imperative as there is acute domestic shortage,” said Rajiv Budhraja, Director General, Automotive Tyre Manufacturers Association (ATMA).

He added that tyres production was down, which in turn dragged down tyre exports. “Stiff import duties on natural rubber and indiscriminate import of Chinese truck and bus radials have gravely affected domestic tyre manufacturing operations,” he said.


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