The rubber industry is one of the key sectors of the Indian economy. India is the fourth largest producer of natural rubber and the third largest consumer of the polymer. As far as consumption of natural and synthetic rubber together is concerned, the country occupies the fourth position. Although, rubber product manufacture started in India, in the year 1920, the industry has been mostly inward oriented, catering to the needs of the vast domestic market. But in the recent past the country has been transforming itself into a major rubber product exporter as well, thanks to the economic policies being pursued by the government and the market integration brought about by the WTO / Regional Trade Agreements.

FACTORS CONTRIBUTING TO THE GROWTH

Like most of the producing countries, natural rubber production in India was solely export oriented during the first quarter of the 20th century. However, sustained growth of the rubber product manufacturing industry was evident since the mid 1930s. Historically, the commercial impetus for this growth revolved around three inter-related developments: (1) the implementation of the International Rubber Regulation Agreement (IRRA) in 1934 and the consequent domestic availability of NR at a lower price in India, (2) the entry of foreign companies in rubber product manufacture to capitalize the advantages arising from cheaper raw material and labour and a growing domestic market and (3) government patronage to the industry in the backdrop of the increased industrial requirements during the inter-war years and the second world war period. The post-war period witnessed a steady expansion of the industry. But the bulk of the consumption of rubber was accounted for by a few large units. But small scale units also could survive because of the relative profitability of rubber product manufacture and the extent of protection from external competition. Government patronage to the industry resulted in liberalized import of rubber and other raw materials and protection from imports of rubber products. The net result was the graduation of India from an exporter of raw natural rubber to a net importer of the rubber and an exporter of finished rubber goods, although in a limited manner, by the late 1940s.

One of the important characteristics of the Indian rubber product manufacturing industry right from the beginning has been the dominance of dry rubber based products. The major contributing factors for this unique pattern of development have been a highly protected, import-substituting and inward-oriented production and the supplementary status of the sector, mainly catering to the requirements of the larger industrial base in the country.

At present there are over 4300 manufacturing units, including 58 tyre factories, turning out products worth US$ 7.7 billion, which is about 1.7% of the total industrial output of the country. The total employment generation by the rubber product manufacturing industry is 465,000. The natural rubber / synthetic rubber consumption ratio is 75:25, while globally the ratio stands at 44:56. The per capita consumption of rubber remaining at 1.0 kg, the market for rubber products in India, with its large population, is likely to grow significantly in the years ahead.