EXPORTS OF RUBBER PRODUCTS & AUTO TYRES & TUBES FROM INDIA

C A P E X I L (India’s Premier Export Promotion

Council)

Set up by Ministry of Commerce & Industry, Govt. of India

7th August 2014

C A P E X I L

CAPEXIL (Formerly, Chemical & Allied Products Export Promotion Council), was set up on 28th March, 1958 by Ministry of Commerce, Government of India.

The vision of CAPEXIL is to promote India’s export of a wide spectrum of Chemical based and Allied products and thereby stimulate the country’s economic growth and help in employment generation.

CAPEXIL is a Multi Products Export Promotion Council and it has sixteen different group of products subdivided broadly under Mineral and Non-Mineral Sector.

Exports of Rubber Products & Auto Tyre & Tubes Panels falls under Non-Mineral Sector.

CAPEXIL has its headquarters in Kolkata and has regional offices in Mumbai, Delhi, Chennai & Kolkata.

C A P E X I L

CAPEXIL understand the various facets of international trade and assist the Indian business community to enhance their exports, attain and sustain a pre-eminent global standing.

CAPEXIL act as an intermediary in establishing business contacts between foreign importers and Indian exporters and thus, providing a two-way service as global trade facilitator

CAPEXIL undertake various promotional measures to promote exports. CAPEXIL being an ISO 9001-2008 certified organization, endeavors to offer a

full range of services including on-line services to Indian exporters and foreign importers.

CAPEXIL has around 4500 member-exporters across India and their quality products enjoy the preference of all major markets across the globe.

CAPEXIL AND ITS SERVICES

An Interface between the Government and the members regarding Trade and Policy related matters.

Participation in national/international trade fairs, organizing seminars/buyer-seller meets.

Dissemination of trade enquiries. Preparation of market reports. Analysis of Indian export trend abroad. Collection and dissemination of global trade data. Disbursement of grants through various market assistance programmes. Publicity & Promoting the “Made in India” brand. Services to Overseas buyers.

TOP 10 GLOBAL EXPORTERS FOR RUBBER AND ARTICLES THERE OF (CHAPTER 40)

Exporters

Value exported in 2013 (USD thousand)

Annual Growth in Value Between

2009-13 (%)

Share in World Exports

(%)

World 201365050 13 100.00

China 23136996 21 11.50

Germany 17649701 10 8.80

Thailand 16959610 15 8.40

USA 14710407 12 7.30

Japan 13439759 8 6.70

Indonesia 9394177 15 4.70

Korea, Republic of 8321428 16 4.10

Malaysia 8295440 13 4.10

France 7741922 3 3.80

Belgium 6010251 9 3.00

GLOBAL EXPORTS OF RUBBER PRODUCTS (CHAPTER 40) 4-DIGIT H.S. CODE WISE

Code Products DescriptionExported Value

2013 (USD thousand)

Annual growth in value between

2009-2013 (%, p.a.)

4011 New pneumatic tires, of rubber 85555526 13

4016 Articles of vulcanised rubber o/t hard rubber, nes 24678651 13

4001 Natural rubber,balata,gutta-percha etc 23283442 17

4002 Synthetic rubber&factice from oil 22891073 14

4005 Compounded rubber,unvulcanised,in primary forms 10064472 16

4009Tubes, pipes & hoses of vulcanised rubber otner than

hard rubber 933987013

4015Articles of apparel&clothing accessories of vulcanised

rubber 684075712

4010Conveyor or transmission belts or belting of

vulcanised rubber 604389510

4008Plate,sheet,strip,rods of vulcanised rubber other than

hard rubber 42091457

GLOBAL EXPORTS OF RUBBER ARTICLES (CHAPTER 40) 4 DIGIT H.S. CODE WISE

Code Products Description

Exported value 2013

(USD thousand)

Annual growth in value

between 2009-2013 (%, p.a.)

4008Plate,sheet,strip,rods of vulcanised rubber other than hard rubber 4209145 7

4012Retreaded/used tire;solid tire,interchangeable tire treads& flaps 2948580 15

4013 Inner tubes of rubber 1460367 11

4014Hygienic/pharmaceutical art of vulcanised rubber 1136522 -2

4007 Vulcanised rubber thread and cord 676864 5

4006Rubber unvulcanised form & articles nes, excl. rods, tubes, discs & ri 598109 2

4003Reclaimed rubber in primary forms or in plates, sheets or strip 380243 18

4017Hard rubber in all forms,including waste&scrap;articles of hard rubber 334397 5

4004Waste,parings&scrap (excl. hard rubber)&powder/granule obtaind therefr 232244 -1

TOP 10 GLOBAL IMPORTERS FOR RUBBER AND ARTICLES THERE OF (CHAPTER 40)

Importers

Value imported in 2013 (USD thousand)

Annual growth in

value between

2009-2013 (%)

Annual growth in

value between

2012-2013 (%)

Share in world

imports (%)

USA 28729529 15 -4 13.7

China 19894818 16 -4 9.5

Germany 16792354 9 1 8

France 8207319 7 0 3.9

Canada 6810754 10 -8 3.2

Mexico 6284016 19 -1 3

United Kingdom 6028928 8 2 2.9

Belgium 5590366 9 7 2.7

Italy 5413019 5 2 2.6

Japan 5405319 11 -15 2.6Sources: ITC calculations based on UN COMTRADE statistics.

TOP 5 COUNTRIES CONSUMPTION FIGURES OF RUBBER

SOURCE – INTERNATIONAL RUBBER STUDY GROUP

All data are in ‘000 tonnes

LAST 5 YEARS CONSUMPTION (NATURAL RUBBER (NR) + SYNTHETIC RUBBER (SR) FIGURES

CHINA INDIA JAPAN THAILAND USA % IncreaseYEAR NR SR

TOTAL NR SR

TOTAL NR SR

TOTAL NR SR

TOTAL NR SR

TOTAL

2009 3307 4230 7537 905 321 1226 636 832 1468 399 253 652 687 1448 2135 27%

2010 3655 4442 8097 944 406 1350 749 989 1738 458 358 816 925 1732 2657 22%

2011 3601 4664 8265 957 423 1380 772 978 1750 487 377 864 1029 1867 2896 14%

2012 3857 5039 8896 988 439 1427 728 962 1690 505 391 896 949 1766 2715 17%

2013 4150 5470 9620 962 471 1433 712 956 1668 520 448 968 913 1698 2611 48%

PER CAPITA RUBBER CONSUMPTION OF THE WORLD

COUNTRY KILOGRAM

JAPAN 11.51

CANADA 7.73

GERMANY 7.57

USA 6.95

CHINA 5.80

FRANCE 5.32

ITALY 4.31

BRAZIL 3.65

UK 2.86

AUSTRALIA 2.15

INDIA 1.16

WORLD AVERAGE 3.12

INDIA’S SHARE IN GLOBAL EXPORTS

2013-14

(In US $ Billion) Percentage

Global Exports of Rubber Articles 201.37 100

India's Exports of Rubber Articles 2.77 1.38

India's Exports 2013-14

(In US $ Million

Auto Tyres & Tubes 1686.82

Rubber Articles 1056.82

Natural Rubber (ITC H. S. Code 4001) 27.21

Total 2770.85

PERCENTAGE SHARE IN RUBBER EXPORTS

Rubber Articles

38%

Natural Rubber

1%

Auto Tyres & Tubes61%

EXPORTS OF AUTO TYRES & TUBES FROM INDIA OVER THE LAST 5 YEARS

787 768

1058

16171731 1687

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Value in US D Million

ITEM WISE EXPORTS OF AUTO TYRES & TUBES FROM INDIA

Value in US$ Million

Products 2013-14 2012-13 % Change

Auto Tubes 64.44 58.65 9.87

Auto Tyres 1602.27 1648.83 -2.82

Tyre Flaps 20.11 23.99 -16.17

Total 1686.82 1731.47 -2.58

EXPORTS OF RUBBER MANUFACTURED PRODUCTS OVER THE LAST 5 YEARS

675

546

751

999 9951057

0

200

400

600

800

1000

1200

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Value in US$ Million

ITEM WISE EXPORTS OF RUBBER MANUFACTURED PRODUCTS FROM INDIA

Value in US $ Million

Item Descriptions2013-

142012-

13 % Change

Automotive Components 101.79 86.62 17.51

Bicycle Tubes 40.19 45.12 -10.93

Bicycle Tyres 50.9 56.19 -9.41

Conveyor, Transmission, V Belts 119.71 121.11 -1.16

Floor Covering & Mats 60.05 50.47 18.98

Gaskets, Washers & Seals 68.27 65.93 3.55

Hoses 73.23 68.05 7.61

Latex, Dipped & Medical Including Contraceptives 84.66 82.12 3.09

Reclaim Rubber & Waste Pairings & Scrap 110.05 75.05 46.64

Rubber Coats & Aprons 1.18 0.92 28.26

Rubber Products Nes 12.98 15.13 -14.21

Rubber Sheets 294.45 295.12 -0.23

Tyre Retread/Camel Back 39.36 33.27 18.30

Grand Total 1056.82 995.1 6.20

INDIAN RUBBER PRODUCTS EXPORTS – STRENGTHS

Indian Rubber Products have grown over 15% CAGR for the past decade.

Exports of Automobile Tyres & Tubes from India have grown over CAGR 21% for the last 10 years.

With an extensive plantation sector, indigenous availability of raw materials and a growing automobile hub, India is a major player in the global rubber industry.

India rubber industry is basically divided into two sectors - tyre and non-tyre. The tyre sector produces all types of auto tyres, conventional as well as radial tyres and exports to advanced countries like USA, EU etc.

The non-tyre sector comprises the large, medium scale, small scale and tiny units. It produces high technology and sophisticated industrial products. The small-scale sector accounts for over 50% of production of rubber goods in the non-tyre sector.

INDIAN RUBBER PRODUCTS EXPORTS – STRENGTHS

The Indian rubber products have been exported over 90 countries in the world including USA, Russia, UK, Bangladesh, Italy, Nepal, Germany, Oman, France, Saudi Arabia, UAE, African countries etc

Rubber industry in India has evolved over a century from plantation-based raw rubber production to manufacture of technologically-advanced rubber products. The industry comprises small and large rubber growers, nursery owners, rubber processors, traders, synthetic and reclaimed rubber producers, tyre and non-tyre product manufacturers/exporters, rubber-wood processors, workforce and consumers in their millions.

The Rubber Industry is highly labour and energy intensive. The Indian Rubber Industry comprises about 450/500 large / medium scale units and nearly 5500 Small and Tiny units.

INDIAN RUBBER INDUSTRY – AN OVERVIEW

Industry Turnover (Est.)Rs.76,000

Crore

- Tyre Sector (Est.)Rs.46,000

Crore

- Non Tyre Sector (Est.)Rs.30,000

Crore

Total Employment (Est.) 30 Lakh

- Plantation / Growers 10 Lakh

- Non Tyre Sector (Direct & Indirect) 10 Lakh

- Tyre Sector (Direct & Indirect, excl. growers) 14 Lakh

- Other Stakeholders (Processing, Rubber Trade, Grading, Quality etc.) 1 Lakh

Global Ranking in Rubber Consumption 4th

Global Ranking in Natural Rubber Production 5th

1st In Natural Rubber Productivity.

2nd Largest In Natural Rubber Consumption.

5th Largest Producer Of Natural Rubber.

4th Largest Global Rubber Consumer.

Huge Scope For Rubber Consumption As Per Capita Consumption Presently is 1.1 Kg China Which Is 5kg. Developed Nations At 12 Kgs.

Fast Emerging As Global Automotive Hub.

India- A Certified Manufacturer Of Quality Rubber Products As Our Exports Have Been Growing At More Than 20% YoY For More Than 10 Years.

Availability Of Technologists Though Short, Largest Amongst Rubber Producing And Consuming Nations.

INDIAN RUBBER SECTOR - STRENGTHS

POLYMER CONSUMPTION vs

PRODUCTION - 2013POLYMER PRODUCTION IN ‘ 000 MT CONSUMPTION IN ‘000 MT

NATURAL RUBBER 919 988

SYNTHETIC RUBBER 110 440

RECLAIM RUBBER 115 112

TOTAL 1144 1540

IMPORTS RISE 100% IN 3 YEARS A LOSS TO EXCHEQUER & LOSS OF DOMESTIC JOBS

Figures in Rs.Crores

Source : MOC Export Import Data Bank

INDIA’S IMPORTS OF RUBBER PRODUCTS

PRODUCT DESCRIPTION 2009-10 2010-11 2011-12 2012-13GROWTH CAGR %

RUBBER COMPOUND 122.35 155 267.28 331.06 170.6

HOSES, TUBES & PIPES 387.38 468.73 622.22 742.72 91.7

CONVEYOR & TRANSMISSION BELT 265.89 305.83 424.08 555.1 108.8

PNEUMATIC TYRES 1420.17 2111.44 2304.69 2546.5 79.3

RUBBER SHEETS & FLOOR COVERING ARTICLES 1364.99 1836.86 2318.77 2715.65 99

MISCELLANEOUS (RUBBER SHEETS, THREAD, GLOVES, EBONITE PRODUCTS ETC) 249.42 351.24 536.53 717.39 187.6

3810.25 5229.16 6473.57 7608.42 99.7

IMPORT DUTY ON FINISHED RUBBER PRODUCTS

SI. No. Item

Import Duty

India China Sri Lanka Bangladesh

1 Compounded rubber, unvulcanised 5 - 10% 8% Up to

15% 12%

2Plates, sheets, strip, rods and profile shapes of vulcanized rubber

7.5 - 10% 8 % 15% 25%

3 Tubes, pipes and hoses 6 - 10% 10 - 10.5% 15% 12 - 25 %

4Conveyor or transmission belts or belting of vulcanized rubber

10% 8 - 10 % 15% 5 - 25 %

5Articles of vulcanized rubber other than hard rubber

10% 8 - 18% 0 - 30% 5 - 25%

6 Rubber Rice De-husking Rolls 0% Up to 80% 15% Up to 20%

LOWEST IMPORT DUTY ON FINISHED GOODS

HIGHEST IMPORT DUTY ON RAW MATERIALS AMONG RUBBER CONSUMING NATIONS

IMPORT DUTY ON RAW MATERIALSSl. Item Import Duty

No India China Sri Lanka Bangladesh

1A Natural Rubber (Dry) 20%/ Rs.30/- 10 15 12

1B Natural Rubber (Latex) 70% 10 15

2 SBR / PBR/ NBR/ EPDM / Chloroprene 10% 7.5 0 5

3 Rubber Chemicals 10% 6.5 0 5

4 Butyl 5% 7.5 0 5

5 Silicon & FKM 7.50% 6.5 0 5

6 Zinc Oxide 10% 5.5 0 5

7 PPT Silica Filler 10% 9 0 0

9 Carbon Black 5% 5.5 0 5

10 Titanium Dioxide 10% 6.5 0 5

11 Magnesium Oxide 10% 3 0 5

12 Process Oils 12% 16 0 12

40% OF RUBBER PRODUCT MANUFACTURERS CLOSED DOWN BUSINESS Source : RSDC

SURVEY OF RUBBER PRODUCT MANUFACTURERS

States Total Running Units

Working Units

Number of Units% of Total units not functioningClosed Not

Reach-able

Total not functioning

Kerala 853 517 55 281 336 39.4 %

Punjab 402 233 20 149 169 42 %

Tamil Nadu 606 346 58 202 260 42.9 %

Maharashtra 598 383 54 161 225 37.6 %

Total 2459 1479 187 796 990 40.2 %

LATEX INDUSTRY

Production, Consumption, Import & Export of Latex Concentrates

2011-12 (Tonnes)

2012-13p (Tonnes)

2013-14p (Tonnes)

Production 76490 73150 68000 Consumption 73190 76705 77500 Capacity 216000 235000 235000

Latex being produced in India can be used to manufacture rubber product

Focus on using the under utilized installed capacity to produce Latex based

rubber products such as balloons, condoms, Latex Foam, etc.

Assist Latex based rubber product manufacturers with technical marketing

financial support.

Mechanism should be in place to ensure domestic Latex production is consumed

in manufacture of Latex based rubber product.

STEPS TAKEN BY OTHER RUBBER PRODUCING NATIONS

EXPORTS CONCERNS

• Non-Availability of Natural Rubber• Import Duty & Inverted Duty Structure • Imports of Increasing Finished/Rubber Products into India• Cess on Imported Rubber & Rubber Cess• Carbon Black – An Important Input for Manufacturing

Rubber Products Placed on the Restricted List & under Safeguard Duty

• Futures Trading in Rubber may be banned• Setting up Manufacturing Clusters or Industrial Parks for

Rubber Products & Auto Tyre and Tubes • Purchase Tax on Natural Rubber by the State Government

to be abolished• Inclusion of “Reclaimed Rubber” in Focus Product Scheme

under Chapter 3 of FTP

EXPORTS CONCERNS

•Withdrawal of Anti-Dumping Duty on Nitrile Rubber •Definition of SME Unit and Requirement for the Revision Thereof•Imports Should be Allowed Based on BIS Standards•Focus Product Scheme (FPS) & Focus Market Scheme (FMS), scrips should be directly credited to exporters account electronically. •15% of the exporters make up 85% of the total exports from our country. This core group of 15% should be clearly identified to offer special facilitation & fast track clearances in the DGFT, Customs, Excise & other trade facilitators to address their needs on an urgent basis. •Income Tax Deduction Under Section 80 HHC

EXPORTS CONCERNS

• Shipping Companies to Charge Cost Based Charges as it adds to Transaction Costs, DG Shipping should be appointed with Regulatory Powers on the same lines as Sri Lanka & Bangladesh

• Drawback Rates should factor in surcharges & duties to offset the high cost of fuel, electricity, octroi, CST & other taxes without value cap.

• Second Hand Machinery should be allowed to import at 0% custom duty against each authorization.

• Labour laws to be made exporters’ friendly to encourage exporters to take commitments without fear of facing labor disputes and costs.

• Development Commissioner for Rubber Industry• Credit facilities at cheaper rate

OPPORTUNITIES

Easy to achieve more than 15% Year on Year

Opportunity to increase our exports approximately by

20% year on year competing with China.

We have technologist, entrepreneurs to do business in

the rubber product industry.

Per Capita Consumption of rubber is only 1.6 kg. in India

viz-a-viz a global average of 3.12 kg.

How do you make it happen ?

Even if we target to reach per capita consumption of 2 kgs our compounded average growth rate shall be 18% per annum.

Easy to achieve as 60% of the rubber products are used in the automotive industry and with a growth witnessed by the Indian Automotive Industry for domestic as well as exports rubber industry is poised for a similar growth.

Double digit growth in export year over year, Indian rubber industry has the proven capability of manufacturing the right quality of products which are accepted globally

Importing of raw materials used for rubber products

manufacturing attract higher import duty than finished

products. this inverted duty structure is causing manufacturers

to become importers of finished products.

Sectors like balloon, rice-dehusking rollers, rubber

compounding fast disappearing from manufacturing horizon.

Countries like Indonesia, Philippines, Vietnam, etc gearing up

to manufacture of rubber products, which are traditionally

exporting NR.

INDIA LOSING COMPETITIVE EDGE FAST

CHALLENGES

NEED FOR A NATIONAL POLICY ON RUBBER

What is National Policy on Rubber ?

National Policy on Rubber will be one document which will provide the

necessary vision and guide the industry for actions to be taken by various

stake holders including the government, Rubber Board, CAPEXIL, AIRIA,

ATMA, Planters, Manufacturers, Importers, Exporters etc. for the benefit of

each segment resulting in propelling the entire sector to a growth rate it is

capable of.

Make India one of the largest consumer and producer of Raw Material and

finished rubber products for domestic as well as exports.

Create a Brand India Synonymous with Rubber and Rubber Products

transforming the rubber industry into a global hub for sourcing, similar to

the Indian IT Industry.

CONCLUSION Critical to retain and escalate our position as a rubber

consuming nation of upto 5 kgs per capita in next 10 yrs.

Establish “Brand India” like the IT sector for quality of rubber and rubber products made in India for global consumption.

We badly need a NATIONAL POLICY ON RUBBER.

Last but not the least the government must trust the industry and the industrialists.

THANK YOU