Indian Rubber Industry : Tyre and Non-Tyre
Exports, and EUDR Compliance- The Road Ahead
India is one of the world’s foremost natural rubber producers, playing a significant role in the global tyre and non-tyre markets. The country boasts expansive rubber plantations spanning 850,000 hectares across Kerala, Karnataka, Tamil Nadu, and the Northeast, with 550,000 hectares dedicated to rubber tapping. Notably, India’s rubber production surged from 775,000 tons in 2021-22 to 839,000 tonnes in 2022-23, accompanied by a rise in rubber consumption from 1,238,000 tonnes to 1,350,000 tonnes during the same period. It’s worth noting that in the last financial year, India imported 38% of its natural rubber requirement. The rubber industry in India is valued at approximately $14.5 billion for FY 2022-23.
The country’s rubber industry is vital for domestic economic activities and significantly influences the international rubber trade. This article explores the nuances of the Indian rubber industry, focusing on its tyre and non-tyre sectors, export dynamics, and the implications of the European Union’s Deforestation Regulation (EUDR).
The Indian rubber industry significantly contributes to the national economy, encompassing both tyre and non-tyre sectors. In the fiscal year 2022-23, India exported tyre worth $2.9 billion (INR 23,125 crores), with a substantial 60% directed towards the European market.
The tyre industry in India is primarily dominated by major players such as MRF, Apollo, CEAT, JK, Bridgestone, Goodyear, Michelin, Continental, Yokohama, MRL, and BKT. Notably, BKT tyres make a significant contribution to India’s exports, accounting for 20% of the total. This sector plays a crucial role in meeting the demands of the rapidly expanding automotive industry. It has been estimated that the sector exported around 800,000 metric tons (MT) of tyres, with natural rubber constituting a minimum of 30% of this. Although the exact export value is not explicitly mentioned, the substantial export volume underscores the tyre industry’s significance in the overall rubber sector and its contribution to the nation’s foreign exchange earnings.
The non-tyre sector, which consists of numerous small and medium enterprises (SMEs), manufactures a wide variety of products, including conveyor belts, hoses, footwear, and gloves. This sector also plays a crucial role in exports, serving both European and non-European markets.
The total export value of $1.0 billion reflects the global demand for Indian rubber products and the sector’s resilience in the face of economic challenges. However, the industry also encounters challenges such as fluctuating natural rubber prices and increasing competition from other rubber-producing nations.
The European Union’s Deforestation Regulation (EUDR) introduces both a challenge and an opportunity for the Indian rubber industry. This new regulation stipulates that all rubber imported into the EU must be free from any association with deforestation activities. Compliance with the EUDR is essential for Indian exporters seeking to maintain and expand their presence in the lucrative European market.
The EUDR places a strong emphasis on the necessity for traceability and thorough due diligence in the supply chains of rubber producers. It demands that exporters furnish compelling evidence demonstrating that their rubber does not contribute to deforestation. This requirement underscores the need for robust tracking systems that can trace the journey of rubber from its cultivation to the final product.
Adapting to EUDR: Opportunities for Innovation and Collaboration
The Indian rubber industry has responded to the EUDR requirements by fostering innovation and increasing investment in sustainable practices and technologies to ensure compliance with environmental regulations. This entails the development of traceability software, improvement of sustainable plantation practices, and collaboration with global sustainability initiatives.
In light of these challenges, TRST01 has launched TRST01Chain, an advanced solution aimed at safeguarding Indian exporters by guaranteeing adherence to international standards, including the European Union’s Deforestation Regulation (EUDR).
TRST01Chain enables comprehensive traceability and transparency within the rubber supply chain, empowering exporters to authenticate and certify that their products meet all requisite environmental and quality standards. Additionally, TRST01Chain addresses the Due Diligence Requirements of EUDR under specific country legal recourse.
TRST01Chain solutions cover more than a million hectares of rubber in countries such as India, Indonesia, Malaysia, Vietnam, Thailand, Ivory Coast, China, Laos, and Côte d’Ivoire.
By integrating TRST01Chain into their operations, Indian rubber exporters safeguard access to critical markets, particularly in Europe. Stringent compliance regulations often pose entry barriers, and this technology not only helps protect the reputation of Indian rubber on a global scale, but also enhances exporters’ operational efficiency by reducing the risks associated with compliance failures and market access disruptions.
As the Indian rubber industry navigates the complexities of global trade and regulation, solutions like TRST01Chain play a pivotal role in maintaining and expanding market access, thereby supporting the industry’s long-term growth and sustainability.
Moreover, the need for EUDR compliance has opened new avenues for collaboration between Indian rubber manufacturers, international regulatory bodies, and environmental organizations. These partnerships aim to enhance Indian rubber’s sustainability credentials, making it more appealing to environmentally conscious consumers worldwide.
Conclusion
As the Indian rubber industry broadens its global reach, the adoption of TRST01’s innovative solution, TRST01Chain, is proving to be essential. This system not only bolsters compliance with international regulations such as the EUDR but also strengthens the industry’s competitive position by ensuring the traceability and sustainability of its exports. Given that a significant portion of these rubber products is aimed at stringent markets like Europe, the capacity to offer verifiable guarantees of quality and sustainability is crucial.
The strategic adoption of TRST01Chain will be crucial for navigating the challenges of fluctuating market demands and stringent regulatory environments. Embracing digital transformation can help the Indian rubber industry protect its existing markets and unlock new opportunities in an increasingly environmentally conscious global economy. This will ensure continuous growth, stability, and relevance on the world stage, making a strong contribution to India’s economic resilience. The integration of TRST01’s solutions enhances this trajectory by providing the tools needed to maintain compliance and competitiveness in global markets.
