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Crisis In Rubber Industry  !!!

by Suman Gupta

Shortage and High Prices of ‘Carbon Black’ Causes

Shut Down of Numerous Units leading to Loss of Jobs.
Industry body seeks permission to import raw material without duty and review of the anti-dumping duty on Carbon Black.

February, 2018 : Indian Rubber industry is at the receiving end again! This time with the acute shortage the Carbon Black – the major ingredient/raw material needed for manufacture of rubber products, leading to shutting down of a number of small and medium sized units across the nation.

All India Rubber Industries Association (AIRIA), being the voice of the Rubber industry, has approached and appealed to the Govt. of India to act in the interest of the small and MSME sector, as the current crisis caused due to the shortage, and spiralling prices of Carbon Black in India, is crippling the rubber industry.

While addressing media Mr Kamal Chowdhury – President, AIRIA said “ Import of Carbon Black from China, Russia and other surplus countries, is restricted due to anti-dumping duties. Due to this, sudden shortage, Small & Medium Enterprises are denied availability and have to approach the unauthorised markets to buy Carbon Black at very high premiums, leading to immense losses to their businesses”.

Mr Chowdhury further stated  The impact of raw material (Carbon Black) shortage is so severe over the past few months that about 1000 plus affected small units are on the verge of closure leading to the loss of nearly 2 lakh jobs, while entire industry is losing about Rs. 750 crore every month”.

As a pro-active step AIRIA recently had a meeting with the major manufacturers of Carbon Black in India to express its concern and seek the solution. However, manufacturers of Carbon Black expressed their inability to meet the supply gap as they were committed to their existing customers, largely in the Tyre Sector, in India, and to the exports. They further confirmed that their plants are running on full capacity, with no further scope of increase in supply of Carbon Black.

To tide over this crisis AIRIA is seeking Central Government to step in and suggested to make a few policy amendments immediately to save the small and medium sized units from closing down and be part of the Prime Minister’s mission ‘Make in India’. The amendments being seeked by the association are :

  • Permit to import the material without duty. This would ease the shortage and improve availability at fair price, so that the SMEs in the rubber industry can also meet their own delivery schedules in local and export markets, and save their units from closure.

(AIRIA is willing to be the nodal agency to see that implementation is fair to all)

  • GOI should Restrict / Stop exports of Carbon Black, for the supply position to ease.
  • GOI should immediately review the anti-dumping duty on Carbon Black as it is open to review considering current local supply considerations as well as the global situation. This has similarlybeen done in the past, in the case of other materials.
  • GOI should push for a cost audit of the companies producing Carbon Black in India to find whether the prices currently charged are exorbitant, with a need to keep a check on Carbon Black prices, in view of the current shortage, and need of the small industries.

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