Rubber is vital for India’s economic growth, yet the industry has recently grappled with evolving challenges. Let’s understand more about it.
In childhood, you might have used rubber to erase pencil marks, but have you ever wondered how rubber is made or what other uses it has? Well, let us tell you that rubber plays a significant role in the development of the Indian economy. The rubber industry is essential for the sustainable growth of Indian agriculture and industry. Rubber is produced in several major states in India, including Kerala, Karnataka, Tamil Nadu, and Assam, with Kerala being the largest rubber-producing state.
In this article, we will take a closer look at India’s rubber industry, explore where rubber is used, understand its importance for India’s economy, and discuss the current status and future outlook of the industry.
Let’s dive in!
What’s Happening?
The annual rubber conference and assembly meetings of the Association of Natural Rubber (NR) Producing Countries (ANRPC) was inaugurated in Guwahati on October 9, 2023. During this event, M. Vasanthagesan, the Executive Director of the Rubber Board, made some important remarks. According to the Economic Times, he mentioned that “low rubber prices, increased labour costs, labour shortage, diseases, climate change, and environmental problems are common challenges that all NR-producing countries are facing today.”
He also emphasised the need for collective efforts to address these shared challenges in the rubber sector. Moreover, he highlighted that extensive efforts are underway in various aspects to promote the overall development of the rubber industry, with the goal of achieving self-reliance in rubber production and product manufacturing.
How is Rubber Produced?
The first rubber plantation in India was established back in 1895 on the hill slopes of Kerala. However, it was in 1902 that commercial-scale rubber cultivation started. Rubber cultivation requires a mild climate to thrive.
The process begins by selecting improved varieties of rubber plants. Once the field is prepared, rubber plants are carefully placed in pits, with a recommended distance of 3 meters between each pit in the field.
To obtain rubber from rubber plants, latex (milk) from the tree is collected by tapping or drilling holes in the tree trunks. After collecting the latex, it undergoes chemical testing to ensure high-quality rubber production. Following this, the latex is left to thicken, allowing the water content to evaporate leaving behind the solid rubber.
Uses and Importance of Rubber
Here are examples of major industries where rubber plays a crucial role:
1. Automotive Industry: Rubber is vital for manufacturing car tyres, seals, and various automotive components that ensure vehicle performance and safety.
2. Electronics Industry: Rubber protects and insulates electronic components, providing essential seals and gaskets to safeguard sensitive electronics.
3. Fashion Industry: Rubber finds its way into the fashion world, where it is used to create items such as shoes, belts, gloves, and other accessories, adding style and functionality.
4. Defence Industry: Rubber enhances the flexibility and durability of defence equipment, producing seals, boots, and other critical gear for military and defence applications.
5. Industrial Infrastructure: Rubber is employed in sealing applications, drainage systems, pipelines, and various engineering projects, ensuring the reliability and longevity of infrastructure.
6. Medical Field: Rubber is used for authorised packaging of Ayurvedic medicines and plays a significant role in medical applications.
The rubber industry isn’t only important for the domestic market but also for global trade. Moreover, it is a significant employment source, providing countless livelihoods.
The number of enterprises in India’s rubber and plastics market is projected to reach 16.88k in 2024, according to a Statista report.
The Indian rubber industry has been experiencing various developments and challenges. According to Moneycontrol and data from the Rubber Board, the production of natural rubber in India was set to exceed 8,00,000 tonnes in 2022-23 after a 10-year gap. However, the industry has recently faced several challenges.
Ramesh Kejriwal, the president of the All-India Rubber Industries Association (AIRIA), mentioned to Business Line that India’s natural rubber production is expected to decline by 5% in the current financial year due to reduced rainfall in Kerala. This decrease in rainfall can impact the cultivation of rubber in the region.
What’s Next?
Ramesh Kejriwal, the President of AIRIA, has noted that the prices of natural rubber have seen a decline of 12% to 34% compared to the first quarter of the last financial year. The prices of synthetic rubber and carbon black are also showing signs of softening. Despite these challenges, the future outlook for the rubber industry in India is optimistic.
Kejriwal mentioned the substantial potential for the industry ahead, with expectations of doubling exports in the non-tyre sector from the current $2 billion by 2025. This indicates a positive trajectory for the industry’s growth.
Furthermore, there is a call for the government to include the rubber industry in the Production Linked Incentive (PLI) scheme, which can provide incentives for manufacturing and boost the sector’s competitiveness and growth.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
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