KOCHI, AUGUST 28:
Cheap and uninterrupted imports seem to have impacted many sectors of the Indian industry recently.
The rubber threads industry is no exception, forcing a majority of the companies to scale down their operations to avoid losses.
According to an industry source, more than 1,500 tonnes of rubber threads have come to the country in the past four months, which is about 50 per cent of the domestic consumption.
This has forced many of the Indian companies to reduce production, as they are not able to compete at low prices.
“Ours is a small industry and a few members have either closed or cut short production with one declaring sick under the BIFR,” a top executive of a leading rubber threads manufacturing company in Kerala told BusinessLine.
Rubber threads are used for various applications such as apparels, food packing, webbing, medical netting, bunkee jumping, etc.
“The heat resistant latex rubber thread (HRLRT) industry faces the brunt of the problem. It will be difficult for the industry to survive, unless the import duty on latex threads is revised,” he said.
The international price of centrifuged latex is ₹65/litre, while it is about ₹110 in India.
This has paved the way for international players to dump materials in the domestic market at cheaper prices.
According to the source, natural latex has an import duty tariff of 70 per cent, while rubber threads can be imported at a customs duty of just five per cent. The international latex prices have been ruling at lower levels compared to Indian latex prices, thereby giving a price advantage to the rubber thread manufacturers in South East Asia.
The source alleged that the Free Trade Agreements with ASEAN countries have benefitted only the counter countries rather than the domestic industry.
The customs duty on rubber thread is on the decline and will be reduced to zero per cent in the next few years. This would further worsen the situation, he added.