By ENS Economic Bureau

KOCHI:  Tyre and rubber industries have asked the government to take urgent measures to stem the slide in domestic natural rubber (NR) production which is on a downward spiral for more than two years now. The data of NR production released by Rubber Board recently shows a significant decline in production of 11 per cent in the first two months of current fiscal.

The fall in production comes on the heels of 16 per cent drop in production in 2014-15 and 15 per cent fall in 2013-14.

“This is the third consecutive year of fall in NR production. Domestic availability has emerged as a major concern for rubber consuming industries. With auto sector coming out of a long recession, the demand for NR is expected to go up this financial year. Tyre industry has put in large investments to meet the pick up in auto demand but raw material concerns are likely to play a spoilsport in the Make-in-India story as far as tyre sector is concerned”, said Rajiv Budhraja, Director General, Automotive Tyre Manufacturers Association.

The consumption of NR rose by 4 per cent in 2014-15 and has held steady during the current fiscal. As a result domestic production-consumption gap in NR is widening. In the previous fiscal, the gap was more than 3.6 lakh tonne.

“On the one hand import duties on rubber have been increased, on the other there is constant fall in domestic production leading to its shortage. Small scale rubber sector has been caught in the crosshairs of domestic shortage

and high import duties on NR. Considering this the purchase tax of 5 per cent on NR should be abolished with immediate effect,” said  Mohinder Gupta, President, All India Rubber Industries Association.