Rubber industry wants export promotion council
Triggered by a sharp increase in demand from America and the European Union (EU), exports of rubber articles are expected to jump by at least 10 per cent in this financial year.
A little over 6,000 units are in the business of manufacturing around 35,000 rubber products for applications in railways, defence, highways and other sectors. Of these, around 100 large units and 3,000 medium size ones have invested in modernising their units, to cater to the export demand; some have tied up with global giants. Some of the latter, such as 3M, Dupont and Sabic, have set up research centres in India, to bring modern technology in synthetic rubber. The other 50 per cent of small scale units face challenges in scaling up their capacity to meet customer requirement. “Our raw material — natural and synthetic rubber — supply is controlled by a few large corporate houses,” says Vikram Makar, senior vice-president of the All India Rubber Industries Association (AIRIA). “We face stiff competition with Chinese manufacturers, including in the US and the EU. We need a favourable policy. The industry needs a dedicated export promotion council to take up our issues — these are now taken to the government by individual companies and often left unaddressed.”
Adding: “Our attempt should be to address trade barriers like high interest rate on working capital, a long-term policy on raw material availability and other issues. We otherwise see our exports growing in double digits, irrespective of growth in the economy.”
Makar is chairman of Oriental Rubber Industries, one of India’s largest producers and exporters of these articles. Data compiled by the Directorate General of Commercial Intelligence and Statistics under the commerce ministry, showed export of rubber articles (excluding nontyre and natural rubber) at ~2,280 crore for 2016-17, from ~2,008 crore in 2015-16. “China has commoditised export of rubber products. We have specialised our products which fetch better realisation, in addition to product-specific demand in the US and EU. That’s why our export to these two destinations continued to move up,” says Vishnu Bhimrajka, director, Polmann India.
The US and EU together take nearly 70 per cent of India’s overall rubber product export. Exporters say they’d like to raise India’s share in the world market to five per cent in the next couple of years from the existing 1.5 per cent. China’s is 11 per cent.