Problems of Natural Rubber Industry in India
In recent years, natural rubber production in India is facing sharp decline. Currently, India is world’s fifth largest natural rubber producer and fourth largest consumer behind China, the US and Japan. In 2012, however, India was on 4th rank after Thailand, Indonesia and Malaysia. Before that India ranked third on the production table after Thailand and Indonesia. The major reason for fall in production includes:
- A serious fall in the productivity per hectare of rubber
- Constant fall in prices of natural rubber, coupled with high labour cost has forced many of the growers (75 per cent small and marginal farmers) to keep away from tapping
Further, this industry is marred by several problems such as:
- Conflict of interests of Rubber Growers and Tyre Companies. The unrestricted massive imports by larger tyre companies pushed down domestic demand; however at the same time; MSME and other small industries which depend on domestic supply of natural rubber demand for urgent measures.
- Other reasons including high input costs; bizarre duty structure, cheap imports and signing of Free Trade Agreements with countries from which import of finished rubber products to India is encouraged.