Kerala is the largest rubber-producing state in India. Rubber is cultivated in 16 states of India. This article will throw light on the rubber production states in India and the cultivation of rubber. Other than Kerala the top rubber producing states in India are Tripura, Karnataka, Assam, Tamil Nadu, Meghalaya, Nagaland, Manipur, Goa and Andaman & Nicobar Islands.

Kerala produces around 74% of India’s total rubber production. During 2017-20, there has been a decline in the production of natural rubber in Kerala. In 2017-18, the natural rubber produced in Kerala was 5.40 lakh tonnes, and by 2019-20, the production of natural rubber reduced to 5.33 lakh tonnes. During the same period, the production of natural rubber increased in the states of Nagaland, Assam, and Tripura.

The total contribution of Kerala to the production of natural rubber in India was 77.8% in 2017-18. By 2019-20 the contribution of Kerala in the total production of natural rubber came down to 74.9%.

With an extensive plantation sector, indigenous availability of raw materials and a growing small car automobile hub, India is a major player in the global rubber industry.  Rubber Product industry in India has evolved over the last 4 decades to manufacture technologically-advanced rubber products. The industry comprises small and large rubber growers, synthetic and reclaimed rubber producers, tyre and non-tyre product manufacturers/exporters. The Rubber Industry is highly labour and energy intensive.

The small-scale sector dominates the rubber industry in India, which is currently estimated to be around ₹75000 crores. Ninety per cent of the 6,000 rubber items production facilities are MSMEs dispersed throughout several clusters. 40% of exported rubber items come from MSMEs.

About 35,000 different rubber products are produced by the rubber industry in India. These goods are used in diverse industries including automotive, defence, healthcare, agriculture, and other specialised fields. This has contributed to the Indian rubber industry’s drastic and quick rise. An increase in the automobile industry, higher average living conditions for people, and an increased pace of industrialization overall all contribute to this growth promise.

In recent years, due to Geopolitical Developments and ongoing Trade War vis-à-vis Trade Disputes for Chinese Products worldwide… India has emerged as Reliable Alternate / Supplier to the World Market which has indeed opened up new avenues on export front for Indian Entrepreneurs to explore.

Rubber Products

• Global exports of Rubber Products reached US$ 219 billion during 2022. Presently, India’s share in global exports is only 2.2% and there is a huge scope for enhancing the exports of Rubber Products from India.
• Exports of Indian Rubber Products have grown over 8% CAGR for the past decade (5 years). With an extensive plantation sector, indigenous availability of raw materials and a growing small car automobile hub, India is a major player in the global rubber industry.
• The non-tyre sector comprises over 6700 large, medium scale, small scale and tiny units. It produces high technology and sophisticated industrial products. The Indian rubber products have been exported to over 90 countries in the world incl. advanced countries like Europe, North America, Japan & Australia
• Rubber Product industry in India has evolved over the last 4 decades to manufacture technologically-advanced rubber products. The industry comprises small and large rubber growers, synthetic and reclaimed rubber producers, tyre and non-tyre product manufacturers/exporters. The Rubber Industry is highly labour and energy intensive. The Indian Rubber Industry comprises about 450/500 large / medium scale units and nearly 6000 Small and Tiny units. Their growth in India and exports are to even advanced countries against world competition. Indian Products have indeed created a respectable BRAND INDIA image.

Auto Tyre & Tube:

• The India tyre market growth is primarily driven by the increasing demand for automobiles in the country. The rapid urbanisation and rising disposable incomes have led to a growing preference for personal vehicles, resulting in higher demand for tyres. Moreover, the expanding fleet of commercial vehicles, driven by the growth of the e-commerce sector and the need for efficient transportation of goods, has contributed to the increased adoption of tyres across the industry. India’s tyre industry is on course to more than double its revenue to $22 billion by FY32 from $9 billion in FY22. The large and growing population of vehicles will continue to support tyre demand in the replacement market, too.
• India’s total export for Auto Tyre and Tube have reached to US$ 2966.8 million during 2022-23. An Imports of Auto Tyre and Tube Products into India have reached to US$ 279.16 Million in 2022-23.
• Total Domestic Production of Auto Tyres & Tubes within India has been approximately worth Rs. 70,000 Crores during 2019-20.
• The major markets for Indian Auto Tyre and Tube markets are China, Malaysia, Italy, Germany, Singapore, Sri Lanka, Hong Kong, USA, UK and Indonesia.

Pre-Import Condition of Natural Rubber

By far the biggest “BUG BEAR” is the pre-import condition as per Public Notice No. 81 dated 9th January, 2015 on NR wherein Pre-import of NR is imposed thereby violating the EXIM Policy wherein exports have been permitted immediately on generation of the file number of the AAs’ by the issuing authority. Further, the exports have to be within 6 months of its imports which is not practical as the delivery time for imports of all items under AA may take 3 to 4 months. The quantities involved for 1 order would not be sufficient to justify duty free imports and hence this would be totally uncompetitive exercise apart from the humongous paper-work. Rubber products is made up of nearly 15 to 20 different items like NR, Synthetic Rubber, Processing Oils, Additives, Carbon Black, Zinc Oxide, Rubber Chemicals, Processing Aids, etc. All these products have to be masticated and mixed and for further process to manufacture the required rubber products. The time frame for imports of all items under AA and then export of first consignment would be self-defeating exercise in futility.

Inverted Duty Structure i.e. Low Import Duty on Finished Rubber Products whereas High / Peak Rate of Import Duty coupled with Anti-Dumping Duties & Safe Guard Duties on Raw Materials must be corrected on priority and this anomaly should be addressed immediately. Such Inverted Duty Structure encourages Import of Inferior Quality & Cheap Finished Rubber Products and discourages the Domestic Manufacturing of Value Added Quality Finished Products by the Indian Manufacturers & Exporters by importing desired Raw Materials.

Due to this negative trend, many Indian Manufacturers, mainly from MSME Sectors and SSI / Tiny Units, have been closed down and large number of Skilled, Semi-Skilled and Unskilled Human Resources / Workers have lost their jobs. The new trend of importing finished goods with low quality standards has come into the place and the same goods are being rebranded and marketed at the cost of Indian Manufacturing Sector. This has resulted into the substantial loss of jobs and reduction of consumption of Natural Rubber and other Raw Materials which has proved detrimental to the Nation’s Growth & Welfare. In a study conducted by the Rubber Board in the state of Kerala, Tami Nadu, Maharashtra & Punjab, 40% of the Units have down their shutters resulting in huge loss of jobs.

Since most of the Rubber Products Raw Materials are Petrochemical based, Single or Large Units have ganged up to show injury against imports of such Raw Materials and managed to impose Anti-Dumping Duty & Safe Guard Duty. A study of their balance sheet would clearly indicate a quantum jump in their share prices after imposition of such duties which is a clear indication of their profiteering at the cost of the Rubber Industry and employment potential that it offers.

To address this issue in its true perspective, there should be at least 25% rate of Import Duty on Finished Rubber Products vis-à-vis Low Rate of Import Duty on Raw Materials without any Anti-Dumping and Safe Guard Duties on Raw Materials. The issue of present High Rate of Duty on Raw Materials including Rubber Chemicals, Carbon Black, Synthetic Rubber, Tyre Fabrics etc. must be resolved immediately in true letter and spirit to ensure the growth of this industry.

Inspection of Imported Natural:  Rubber should be stopped forthwith specially under Advance Authorization and the exporters should be treated with respect as they have proved themselves to be responsible for their own quality inputs clearly showing 21% CAGR on exports of finished products.

Imports of Non Standard Finished Rubber Manufactured Products should be regulated

To give impetus to the Indian Rubber Industry and to improve Consumption & Employment Potential further, Import of all Non Standard Finished Rubber Manufactured Products should be regulated and only imports under BIS Standards should be permitted as has already been done in the case of tyres. BIS has already issued various specification standards on large range of Rubber Products which itself indicates that there is substantial manufacturing of these Rubber Products within India and hence, Import of substandard products must be discouraged. There are Protectionist Measures imposed by European Union to have REACH, ROHS and PAH compliance with CE Marking for import of such goods into their countries. On similar line, India must take urgent steps to safeguard the environment and contribute to the efforts of the world community under Corporate Social Responsibility (CSR) Measures.

Further all such Imports should attract high Import Duty of nearly 25% as it is done in case of Natural Rubber to give protection to the Finished Rubber Products Industry in India and the growers alike as this would stimulate the consumption of natural rubber.