Excessive import of rubber products is leading to unwarranted competition to micro, small and medium enterprise segment in the industry, a senior Rubber Board official said today.
“Excessive import of rubber products including tyres, often on account of dumping and tariff concessions offered under Free Trade Agreements (FTAs), is a critical issue,” Rubber Board’s Chairman A Jayathilak said.
“Vulnerability of domestic rubber product manufacturing sector especially the micro, small and medium enterprises segment, to such unwarranted competition is to be reckoned seriously,” he said this at ‘India Rubber Meet’ here.
One of the main reasons for the dwindling competitiveness of non-tyre rubber products manufacturing sector has been lower scale of operation and lack of technological advancement, he added.
He further said that “consortium approach to counter dis-economies of scale and support for technological improvement through PPP mode regimes need to be promoted”
“Rubber is one of the most critical, strategic and versatile raw materials in the modern world and will remain so the in the foreseeable future. Its demand and prices are positively linked to economic growth. Link between the industry and economic growth brings in fortunes during booms and hardships during busts,” he said.
Jayathilak also said that cycles of economic growth result in cycles of commodity price movements, applicable for natural, synthetic and reclaimed rubbers also. The impact of low prices will be more severely felt in natural rubber production sector, dominated by small and marginal growers.
“The low prices will have a critical bearing on planting and replanting decisions and future availability of natural rubber. Providing safety nets for smallholders to protect them against price and other risks under the prevailing socio-economic and political environment, is a critical task which has to be deliberated upon,” he added.
