The All India Rubber Industries Association (AIRIA) was established in 1945 with the purpose of representing the rubber sector in India. As the leading organisation for the industry, AIRIA works towards advancing its interests and facilitating cooperation, growth, innovation and development within the industry. RJA interviews AIRIA’s newly appointed President Shashi Singh.
How is the northeast region of India emerging as a prominent player in the rubber Industry?
Singh: The northeast region of India, including states such as Assam, Tripura, Meghalaya, Nagaland, Manipur, Mizoram, and Arunachal Pradesh, have a favorable climate with ample rainfall and moderate temperature that provides the necessary conditions for the growth of rubber trees.
The central government has provided various incentives and support schemes to encourage rubber cultivation in this region. These include subsidies for establishing plantations, financial assistance for infrastructure development, and R&D initiatives for increased productivity. This has led to a push in many small and marginal farmers to take up rubber cultivation as a source of income.
What factors are driving change and development in the North-East rubber Industry? And how is this beneficial for the economy and environment?
Singh: Agriculture has long been the backbone of the economy in the northeast region, providing livelihoods for a significant portion of the population. However, with the decline in traditional crops, there has been a growing need for diversification in the agricultural sector. This has led to a shift towards exploring new crops and cultivation techniques that can provide farmers with a stable source of income.
One such crop that has gained popularity in recent years is rubber. The northeast region has ideal climatic conditions for rubber cultivation, and its demand both domestically and internationally has been steadily increasing. This has prompted many farmers to switch from traditional crops to rubber cultivation, as it offers higher returns and better market opportunities.
This has not only benefitted the farmers but has also contributed to the overall development of the region. Rubber cultivation also has the potential to bring about significant economic benefits for the region, such as employment opportunities and export potential. With its ability to thrive in the region’s climate and terrain, rubber cultivation is seen as a sustainable and viable option for diversifying agriculture in the northeast region.
What new technologies and advancements are used in the North-East rubber industry?
Singh: Over the past five years, substantial efforts have been made to improve the rubber industry’s infrastructure in the northeast region. This includes the establishment of processing units, warehousing facilities, transportation systems, and research institutes to support the entire rubber production value chain.
Most recently, the Tripura government organised an Investment Summit, inviting companies in the rubber industry to set up manufacturing plants for rubber parts. They are offering various attractive incentives, such as Capital Investment Subsidy, Tax rebates, Power subsidy, Interest subsidy, EPF and ESI reimbursement, and Export Promotion.
The specifics of these incentives are as follows:
– Capital Investment Subsidy: companies can receive up to 40% (maximum of Rs.70 lakh per year) of their capital investment.
– establishments will prioritise purchasing from businesses in the rubber industry.
– Tax rebates: businesses can receive a 100% rebate (up to Rs.60 lakh per year) on taxes.
– Power subsidy: companies can receive a 25% subsidy (up to Rs.20 lakh per year) on their electricity bills.
– Interest subsidy: businesses can receive a 4% subsidy (up to Rs.3 lakh per year) on their interest payments.
– Standard Certification Charges: 100% (onetime)
How did rubber plantations in the northeast lead to the economic growth of the region?
Singh: The rubber industry plays a crucial role in employment generation, particularly in developing countries. This industry is known for its labour-intensive operations, which has led to the creation of numerous job opportunities for individuals in the local communities.
It has contributed significantly to reducing the unemployment rate and has provided a stable source of income for many households. One of the primary reasons for the labourintensive nature of rubber industries is the diverse range of activities involved in the production process.
From collecting latex from rubber trees to processing and manufacturing final products, there are various stages that require a skilled and semi-skilled workforce. This provides an opportunity for individuals with different levels of education and skills to work in the industry, thus catering to a wide range of the labour force. The industry also provides opportunities for women to participate in the workforce, thus promoting gender equality and empowerment.
In what way has rubber industry in the northeast region attracted significant investments from both domestic and international players? And how does the government promote development and growth?
Singh: The export potential in the northeast region has greatly expanded due to a growing demand for rubber products worldwide, especially in thriving industries like automotive, construction, and healthcare.
The North East Industrial Development Scheme (NEIDS), 2017 provides central incentives such as capital investment incentives for credit access (30%), interest incentives (3%), insurance incentives (100%), Goods and Service Tax (GST) and income tax reimbursement, transport incentive, and employment incentive (EI).
Positioned near significant markets both domestically and internationally, the northeast region has successfully leveraged this advantage, resulting in the growth of export-focused rubber industries and highlighting its promising potential for exports.