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FDI in rubber sector opposed

By Staff
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Kochi, Mar 24 (UNI) Opposing the Central Government decision to allow foreign direct investment (FDI) in rubber processing and warehousing, the Indian Rubber Dealers Federation today said that this will ''immensely harm the existing harmony'' in the sector.

Addressing a press conference here, federation president George Valy said that this policy change would facilitate ''foreign monopoly'' in the distribution channel also.

Stating that the Indian rubber production consisted of 71 per cent sheet rubber and 11 per cent each of technically specified rubber (TSR) and processed latex, Mr Valy said in India, TSR processors were in the small sector with production capacities of four to 25 tonnes a day as against other rubber producing countries, where the processing units had capacities ranging from 150 to 250 tonnes per day.

''The existing 58 small TSR units are producing 285 tonnes per day and one large processing unit of the foreign investor will be sufficient to eliminate all the existing units. Likewise, one large unit will throw out of gear the existing latex processors. Ten FDI units will be able to process the entire field latex produced in the country into TSR, thus eliminating production of sheet rubber and its presence in the market,'' Mr Valy said.

This would directly hit the livelihood of hundreds and thousands of workmen involved in the processing sector, the dealers and the processors, he added.

Claiming that the rubber growers and consumers also were better off presently, Mr Valy said the one million small growers get a return of 97 per cent of the terminal market price as against their counterparts in other major producing countries, who get a return of 75 to 85 per cent.

The domestic rubber industry also was geeting rubber at Rs 10,000 per tonne cheaper than the world market rates.

Objecting to FDI in warehousing also, he said the country presently had warehousing capacity of 200,000 tonnes. With estimated stocks at any given time not expected to exceed 125,000 tonnes, the creation of new warehousing capacity for rubber was ''unwarranted'', he added.

Asked if the federation had given any memorandum to the Centre, he replied in the negative and said the federation was first trying to create public awareness on the issue.

UNI ARC VV SS1442

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