Tyre companies bet on northeast for natural rubber

12:03' AM - Tuesday, 24/11/2020

In a unique initiative, tyre manufacturers are pumping money to grow raw material — natural rubber — in the northeast. This is a template that could be repeated in other sectors, including price-sensitive vegetables such as tomatoes, onions and potatoes. The move comes as the government, which had licensed the import of tyres, has agreed to offer some relaxation.

Manufacturers and traders have been allowed to import tyres, subject to a ceiling of 40% of their earlier imports, but need to phase this out over three years. Original equipment manufacturers, which import tyres for vehicle exports, have been allowed to ship in the key input. Further, licences will be granted on a one-time basis where BIS stamping has been done, sources told TOI.

In June, the government had licensed tyre imports, citing multiple factors including rising shipments from China and Thailand and dumping from other countries, despite adequate manufacturing capacity in the country. Besides, the Centre wanted to help the domestic industry, which had invested in capacity-creation but trade agreements resulted in a flow of cheaper imports.

Sources said that as part of an initiative by the commerce and industry minister Piyush Goyal, tyre manufacturers will invest around Rs 1,100 crore for growing high-yielding varieties of natural rubber in the northeast. Against an average yield of 1,200 kg per hectare, the target is to raise it to around 1,500 kg a hectare. India is an natural rubber-deficit country with production and consumption of natural rubber standing at 712,000 million tonnes and 11,34,210 million tonnes respectively in 2019-20.

“Around 70% of natural rubber is consumed by the auto tyre sector in India. This would also contribute to socio-economic development of northeast, while improving the standard of living of the beneficiaries, the majority of whom hail from tribal and other resource-poor communities. The improvement in the quality of processed forms of natural rubber will help the farmers to get a better price for their produce as well,” said an officer.

This also marks a unique initiative where the user industry is tying up with farmers. “We are analysing if the model can be replicated for some of the vegetables so that farmers’ interest is protected during the upside as well as downside,” said an officer. - GLR -

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