GS Paper III 

News excerpt

The financial assistance for the Rubber sector under the ‘Sustainable & Inclusive Development of Natural Rubber Sector’ has been increased by 23% from Rs 576.41 crore to Rs 708.69 crore for the next 2 financial years (2024-25 and 2025-26).

More details on the news:

• ToThe support the rubber industry, planting of rubber will be undertaken in 12,000 ha in traditional areas during 2024-25 and 2025-26 with an outlay of Rs 43.50 crore.
• For this, the rate of assistance has been increased to Rs. 40,000 per ha from the earlier Rs 25,000 per ha. This will help to cover the increased cost of production as well as provide additional incentive to growers for planting rubber.
• Furthermore, 3752 ha will be brought under rubber cultivation in non-traditional regions with an outlay of Rs 18.76 crore during the same period.
• According to the Ministry of Commerce & Industry, planting materials worth Rs 50,000 per ha will be supplied by the Rubber Board.
• This will be over and above the plantation being carried out under the INROAD project in the North East. Planting assistance at Rs 2,00,000 per ha will be provided for SC growers in non-traditional regions.

Status of Rubber industry in India

• Global Standing: India is among the world's largest producers of rubber and the third-largest consumer of the commodity.
• Regional Concentration: Kerala accounts for nearly 70 per cent of India's natural rubber output. There are 1.3 million rubber growers in the country and Kerala accounts for a major chunk of the production, which was 5.99 lakh tonnes in 2022-23 followed by Tripura with 89,390 tonnes of natural rubber production. 
• Product Diversity: The wide range of rubber products manufactured by the Indian rubber industry comprises all types of heavy duty earth moving tyres.
• The rubber industry in India is basically divided in two sectors - tyre and non-tyre sector produces all types of auto tyres, conventional as well as radial tyres and exports to advanced countries like USA.
• Tyre Sector Dominance: The non-tyre sector comprises the medium scale, small scale and tiny units. It produces high technology and sophisticated industrial products. The small-scalesmall scale sector accounts for over 50% of production of rubber goods in the non-tyre category.
• Diverse Consumption Patterns: Going by share of rubber consumption, automotive tyre sector is the single largest sector accounting for about 50% consumption of all kinds of rubbers, followed by bicycles tyres and tubes 15% footwear12%, belts and hoses 6%, camelback and latex products 7%. All other remaining rubber products put together account for 10%.

Challenges of rubber industry

• Low rubber prices: The industry has grappled with low rubber prices, which have impacted the economic viability of rubber cultivation
•    Increased labor costs and shortage: Rising labor costs and labor shortages have added to the challenges faced by the industry
•  Climate change and environmental issues: Changing weather patterns influenced by climate change pose challenges to rubber farming, particularly in traditional cultivation areas like Kerala
•  Import dependence: India is largely dependent on imports from Vietnam, Malaysia, Indonesia, and other Southeast Asian nations. India also imports a huge chunk of natural rubber from Ivory Coast.
•  Import competition: The influx of cheaper imported rubber puts pressure on domestic prices and discourages domestic production.
•   Lack of technological adoption: Limited adoption of technological advancements in the industry hampers productivity and competitiveness

Steps taken to promote rubber industry

• The Rubber Board is constituted by the Government of India for the overall development of the rubber industry in the country.
• The scheme promotes forums of smallholders of rubber viz., Rubber Producers Societies (RPS) work for empowerment of rubber growers.
• In the next two years, assistance will be provided for the formation of around 250 new RPSs.
• Establishment of three nodal centres of National Institute of Rubber training (NIRT) in NE region Agartala, Guwahati and Nagaland have been proposed with an outlay of Rs 5.25 crore in next two years, primarily to promote MSMEs in this region by imparting training in product manufacture and quality control.

Conclusion:

Amidst challenges, increased financial aid, strategic plantation initiatives, and measures to empower growers indicate a resilient trajectory. With technological advancements and training programs, the industry is poised for sustainable growth and enhanced global competitiveness.