RUBBER GOODS INDUSTRY (NON-TYRE SECTOR) IN INDIA UNDER GLOBALISATION

Abstract

The objective of the study is to analyse the impact of NR price hike on micro and small enterprises in the non-tyre sector of the rubber products manufacturing sector during the economic reform period from 1991. The study looks also into the process of transformation in the non-tyre sector of the rubber goods industry during the economic reform phase. The rubber goods manufacturing industry includes an advanced technology based and large capital owned automotive tyre sector and predominantly labour intensive, technologically primitive and small capital based non-tyre sector. The products in the non-tyre sector, particularly the latex based segment, is manufactured with natural rubber accounting for more than 60% of the cost of production. The viability of non-tier products from the micro and small enterprises are contingent on the price of NR. During the economic reform phase in India, the price of NR became volatile with a sudden spurt during the first half of 1990s and a prolonged trough period from 1997 to 2002, followed by a steady hike in price from2003.The upward movement continued, to a great extent, till 2012. The hike in NR price has destabilized the micro and small peasant industries, particularly in the non-tyre sector. It is concluded that micro and small enterprises of the rubber goods industry have been largely eliminated from the market rendering a large chunk of the workforce jobless. The institutional mechanism to intervene in the crisis of the small producers is fragile and inadequate. Transformation in the rubber goods industry has resulted in the concentration of market for rubber goods in fewer and large enterprises. In a situation of market concentration in a few hands, the market for NR may turn into a buyers’ market dominated by a few large enterprises like automotive tyre corporations, which would in turn augur doom for a million of submarginal and marginal NR farmers in India.