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Projecting a 1,89,000-tonne deficit in production of natural rubber during 2011-12, the tyre industry has asked the Government to bridge the gap by allowing duty-free import of 200,000 tonnes.
In the last four financial years, the production has increased by only 1 per cent, while consumption has increased by over 15 per cent, the All-India Tyre Manufacturers Association (ATMA) Director-General, Mr Rajiv Budhraja, told reporters here today.
During the current fiscal, domestic consumption is likely to lag behind production by 189,000 tonnes.
New capacities and major expansions undertaken by tyre companies to cater to the booming automobile industry will lead to an increase in consumption by 15,000 tonnes, he said.
The Rubber Board has projected an increase in consumption by only 40,000 tonnes during the current financial year and the gap between domestic production and consumption has been projected at 75,000 tonnes.
The “conservative consumption estimates by the board might impact the desired policy making for rubber sector”, he said.
AITMA and the All-India Rubber Industries Association (AIRIA) also made presentations before the Rubber Board at Kottayam, stating that taking a cue from China, urgent policy interventions are imperative to ensure timely and competitively priced availability of natural rubber to user industries.
In view of the widening gap between natural rubber supply and demand, coupled with growth in tyre demand, a rise in volume of imports of finished products is likely in light of the constraints to domestic production.
As a result, value addition of natural rubber to produce finished products, particularly tyres, will take place outside the country, especially in China, which has ensured adequate and timely availability of natural rubber to its industry through timely interventions, including acquisition of land outside the country, he said.
The AIRIA President, Mr Vinod Simon, said with the growing deficit between production and consumption, rubber imports were inevitable, failing which the import of finished products will take place, denying the opportunity of value addition within the country.
Domestic natural rubber deficit and expensive imports have been inhibiting the “full blossoming” of the industry in the country, he added.
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