Rubber finds application in number of products, which are used in all industries. India is the third largest producer and fourth largest consumer of natural rubber in the world and also the fifth largest consumer of natural rubber & synthetic rubber put together. In this interaction with IPF, Kamal K Chowdhury, President, The All India Rubber Industries Association (AIRIA), discusses latest demand trend and India’s position in the global rubber industries market. 

 

How is the present status of the rubber industry in India?

 

‘Rubber always and forever’ meets the road. No rubber, no transport, no mining, no energy, no household appliances, and so on. This infers the significance of the rubber sector. If not more, the downstream rubber sector of India falls broadly under 27 distinct classes with far reaching sub-classes of end-products. 

 

The present status of the industry may be evaluated fundamentally in terms of consumption of natural rubber (NR) and synthetic rubber (SR), being the key raw materials, density of the manufacturing units and market consolidation in world-wide point of view. Contrasted with the previous year, our consumption of NR and SR in 2016-17 increased by 5 percent and 8.2 percent to 1.04 and 0.6 million tonnes respectively. 

 

For dry rubber products, in general, our reclaimed rubber segment has also made much progress with expanding production and consumption. While the west, south and north zones outpace the east zone, the density of the manufacturing units is not universal. Some of the states and union territories have either no or negligible presence in the Indian rubber industry plot. Nonetheless, our value-added rubber goods have large market potential both within the country and abroad. 

 

The export of rubber & articles thereof as a whole increased by 7.85 percent to Rs 16,718.2 crore in 2016-17 compared to the export a year ago. Like-wise the export of rubber-canvas footwear also increased to Rs 2,268.4 crore in 2016-17 with a growth of about 13 percent.

 

How is the demand for rubber products from auto & auto component industry?

 

Rubber is fundamental to vehicles, and the auto industry is essential to the rubber industry. The reliable published data reveal that upwards of 887 million vehicles were manufactured worldwide in 10 years till 2016. Now there are 985 million cars and 369 millions vans & trucks on the road. India with 30 million vehicles is the sixth biggest vehicle producing nations of the world, after, China, USA, Japan, Germany and South Korea. 

 

The insights demonstrate the CAGRs of the turnover and export of Indian auto component industry altogether as 7 percent and 11 percent respectively from 2011-12 to 2016-17. Beyond the big basic building blocks such as engines and transmissions, a large number of component parts of rubber go into assembling an automobile. The demand of auto rubber parts in the automobile OEM and replacement segments can be construed from the above industry data.  

 

What are the key challenges before rubber industry in India?

 

The large units segregated, the constituents of the Indian rubber industry are in a general sense MSMEs. A part of them, particularly the micro units are yet to be in the perfect technique of preparing in the fast changing scene of business. Against this backdrop, the challenges are chiefly operational challenges, innovation needs, technology priorities, investing for the future, new product development, marketing challenges, talent management, material costs - mastering the volatility, price reduction pressure, rising labour costs, inventory management, order fulfilment strategies, stiff competition, transportation / logistic costs, becoming environmentally viable, and so forth. Get the job done to state, the critical test is to impact a positive development of the Indian rubber industry into an astute production line of the world - a class of its own - to the bigger idea of Industry 4.0.

 

What are the latest trends in rubber industry?

 

The global manufacturing sector in general underwent a turbulent decade: a severe recession choked off demand. Now the global growth is progressively firming, contributing to an improvement in confidence. With a recovery in industrial activity coincided with a pickup in global trade, the latest trend in rubber industry is by and large upward, the development is anticipated to stimulate in 2017-18 before reinforcing further in the years ahead.

 

What role AIRIA is playing to serve the needs of Indian rubber industry?

 

AIRIA has been in the journey to work with grace, space and pace for progression of the Indian rubber industry as a true catalyst. Significantly, our exercises with industry advancement objective have beneficial trade facilitation influence. 

 

A think tank comprising of industry leaders has been created, where thoughts and views on 'Vision 2025 of Indian Rubber Industry', with focus on MSME, are discussed, recorded and a report is informed to our members and the rubber fraternity.

 

In order to give a boost to this industry, what are your suggestions to the government?

 

We raised many issues and urged the Government for curative steps. Our recommendation is that the Government may embrace a wide range of measures to impel the country’s manufacturing sector including the rubber sector as an imperative component of the ‘Make in India’ drive to build things here and sell everywhere. Frankly, our Prime Minister is sharp for critical reforms. Ideally, the reforms significant and basic to the manufacturing industry’s growth and development to become globally competitive will spur the overall improvement of the nation. 

 

Some of serious concerns of the Indian rubber industry are inverted duty structure; DGFT Notification 32 dated January 20, 2016 (allowing import of natural rubber through sea ports of Chennai and Nhava Sheva only), and DGFT Public Notice 81 dated January 9, 2015 regarding amendment in Appendix – 30A relating to Export Obligation Period under Advance Authorization/DFIA Schemes (Natural Rubber – 6 months).

 

Finally, outlook for the rubber industry in India

 

The outlook of the Indian rubber industry is on the whole positive. In today’s globalised, free-market environment, the ability to satisfy customer expectations is core to profitability. Customer wants are never static. Planning for the unpredictable and uncontrollable may seem an impossible irony, but many firms appear to recognise that in a period of turbulence, an organisation’s ability to flex and respond is critical for sustaining growth. I am a proponent of more constituents of the industry getting involved in the globe. The size of the business - small, medium or large – does not matter.  Promoting trade both within the country and in any part of the world is a need.