Explanation:

Small Scale Industries (SSIs) are defined as industries that require low capital investment and less human resources. These industries contribute significantly to the economic growth of the country by providing employment opportunities and by promoting entrepreneurship. However, SSIs face stiff competition from various sources, of which cheap imports are the most significant. The following points explain why SSIs face competition from cheap imports:

1. Advantages of Cheap Imports:

Cheap imports are products that are produced in foreign countries and imported into the domestic market at a lower cost than the locally produced goods. The main advantage that cheap imports have over domestic goods is the cost factor. Cheap imports are usually produced in countries where the cost of production is low due to lower labor costs, fewer taxes, and cheaper raw materials. As a result, these products are sold at a much lower price than the locally produced goods.

2. Impact on Domestic Industries:

The availability of cheap imports in the domestic market affects the competitiveness of the domestic industries, especially the SSIs. The SSIs usually operate on a small scale and have limited resources, which makes it difficult for them to compete with the cheaper imported products. The cheap imports make it difficult for the SSIs to increase their market share and to expand their operations.

3. Quality of Goods:

The quality of the imported goods also plays a significant role in the competition faced by the SSIs. Imported goods are usually of better quality than the locally produced goods. This makes it difficult for the SSIs to compete with the foreign products, as the consumers prefer products that are of better quality.

4. Government Policies:

The government policies also play a significant role in the competition faced by the SSIs. The government policies such as trade agreements, tariffs, and subsidies have a significant impact on the competitiveness of the domestic industries. The government policies that favor the import of cheap goods over the locally produced goods can negatively impact the SSIs.

Conclusion:

In conclusion, SSIs face stiff competition from cheap imports due to the cost advantage, quality advantage, and government policies. The government needs to formulate policies that promote the growth of the SSIs and reduce their dependence on imports. The government can promote the growth of the SSIs by providing them with financial assistance, technical support, and favorable policies.