The rubber industry which is reeling under GST and high import duties on raw rubber is seeking to set up a separate export promotion council to address these issues.
The import duty on finished rubber articles ranges between 0 to 10%, while the import duty on raw rubber range between 5% to 70%. The GST too has placed rubber in the bracket of 18 to 28%.
For encouragement of exports of rubber products, All India Rubber Industries Association (AIRIA) has asked the central government for a separate ‘Rubber Export Promotion Council (Rubexil)’ with a view to maximize the export potential of the rubber products industry. At the same time it is also promoting use of newer technologies in the sector, both in terms of newer formulations and increased automation in line with the rest of the industry, which is now adopting the concepts of Industry 4.0 globally.
India is the 3rd largest producer and 2nd largest consumer of rubber in the world. Estimates suggest over two million people are employed in the rubber industry including tyre units, and another one million in the plantation sector across the country.
“Rubber is a sunrise sector in India and fits perfectly with the government’s Make in India and Skill India initiatives, but also suffers from the shortage of skilled labor and abnormality in the duty structure which is unfair to domestic manufacturers,” said Vikram Makar – Sr. Vice-President, AIRIA.
The rubber industry in India manufactures around 35,000 different rubber products that find use across critical sectors like Auto, Defense, Healthcare, Agriculture and other niche areas. The rubber products industry in India, the size of which is currently estimated at Rs 75,000 crore, is dominated by the small-scale sector. Around 90% of the 6,000-plus rubber products manufacturing units in the country are micro, small and medium enterprises (MSMEs), and they account for 40% of the rubber products exports.
We wish to produce quality products at a competitive price for which the raw material prices need to be in tandem with international levels. The per capita consumption of rubber in India is just around 1 kg, while at the international level it is at around 3.5 kg per person. With the motor vehicle industry poised for a huge growth, we are confident that the industry will grow in double digits in the coming years,” said Makar.
AIRIA maintains that India’s share of export of rubber products can be easily enhanced to 5% in the next 5-7 years to take the country to the top 5 exporters in this sector. “This gives us an idea of growth potential and we are working towards this objective,” adds Makar.