Demand push: Rubber industry looks to double exports by ‘25

AIRIA president Sawar Dhanania said the global market for rubber products which is estimated at around $212 billion today is also expected to grow by 2025.

Rubber industry, Rubber sector, Indian economy, free trade agreement (FTA), MSME sector, Business news, Indian express business news, Indian express, Indian express news, Current Affairs

Workers are working, putting rubber mat roll in the field, making the road, where railway track will be prepared to connect India-Bangladesh in the land levelling zone for the proposed transhipment Yard at Nischintapur, near Charipara under Indo-Bangla railway project. Express Photo by Abhisek Saha. 07.02.2020.

The $2-billion non-tyre rubber sector is aiming to double its exports by 2025, according to the All India Rubber Industries Association (AIRIA).

AIRIA president Sawar Dhanania said the global market for rubber products which is estimated at around $212 billion today is also expected to grow by 2025. “Because MSMEs are so important to India’s economy and commerce, we believe that India’s free trade agreements (FTAs) should include provisions to address the special concerns, demands and barriers that MSMEs may face while doing business in foreign markets,” Dhanania said at a meeting of the association in Mumbai.

He said the government should take steps to ensure that the terms of the FTAs benefit the MSMEs for internalisation, with trade facilitation mainstreamed in MSME development goals. “MSMEs can work world-wide by creating a level playing export infrastructure, improving their financing conditions, educating them about suitable marketing channels and facilitating their working with trading companies,” he said.

Shashi Singh, senior vice president of AIRIA, said, “Indian Institute of Foreign Trade (IIFT) and the export promotion councils should educate MSMEs on export procedures, documentation requirements, and the finer points of export.” “We expect IIFT and the EPCs should share export market intelligence and arrange specialist meets. It will be beneficial to individuals who are new to exports and wish to understand how to become export-ready,” Singh said.

Explained

Global demand

The rubber industry has potential for exporters as India is a labour-intensive market. However, with the war in Ukraine, there have been some problems like availability of raw materials and rise in shipping costs. The global demand for its products are likely to rise in the near future.

“In the last 1-1.5 years, the government released Rs 55,000 crore under MEIS incentives as a reward. There are 13 trade agreements under which 12 are already implemented. Under India and the UAE agreement, 97% of Indian products exported get the direct benefit,” said Ramesh Holiachi, Joint Director General of Foreign Trade.

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“The India and Australia agreement is yet to be notified by the Indian government. The Australian government has provided geo-duty concessions to India…. 91-97% of Indian products will get duty concession in the Australian market. Footwear, pharmaceuticals and textile industry in India will benefit from this agreement,” said Holiachi.

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AIRIA said the rubber industry has a huge potential for exporters as India is a labour-intensive market. “Due to Covid-19 and Ukraine war crisis, there have been a host of problems like availability of raw materials, increase in shipping prices and challenges to the cash flow. India has the highest cost in logistics at 17-18 per cent,” AIRIA said.