Of the 2,300-odd sports goods manufacturers in the country, 800 are based in Meerut, Uttar Pradesh. Most of them are struggling in the face of rising imports from China
Meerut used to have nearly 400 micro enterprises manufacturing badminton racquets and shuttles. Most have shut shop. Manufacturers of sports goods and fitness equipment in this industrial hub in western Uttar Pradesh are simply unable to compete with Chinese imports.
Of the 2,300-odd sports goods manufacturers in the country, 800 are based in Meerut. And most of them are struggling in the face of rising imports from China.
“Even after heavy customs duty, the cost differential between what we manufacture and what is imported from China is huge. In some cases, the imported items are more than 100 per cent cheaper than what we produce here. In this scenario, many of our manufacturers do not stand a chance,” says Rakesh Mahajan, general secretary of the Meerut-based Sports Goods Manufacturers’ Federation.
The situation in India’s other sports goods manufacturing hub, Jalandhar, is no different, he says. Indian manufacturers are estimated to export sports goods worth Rs 800 crore a year. But other than cricket gear, they are losing their advantage. In cricket, too, local manufacturers have seen a slump in business in the last two years.
Chinese manufacturers receive uninterrupted power supply, work with the latest technology and enjoy economies of scale. “We suffer from frequent power cuts, patchy infrastructure and rising labour costs,” says Mahajan. “Sectors like toys, electronic items, and mobile phones are flooded with Chinese goods. The situation is no different in other areas where medium and small enterprises operate,” says Rajkumar Narula, another Meerut-based businessman.
Bicycle manufacturers of Ludhiana in Punjab, too, are facing a tough competition from Chinese manufacturers. Companies have resorted to large-scale imports of Chinese bicycle parts, especially for premium cycles. Small Indian units making parts and supplying to big manufacturers are therefore facing the heat.
One leading bicycle manufacturer is set to launch its premium range in October based on parts that are all imported from China. A senior executive with another leading bicycle manufacturer says even ‘Made in India’ cycles have “critical imported components.”
“Importing bicycles from China works out to be much cheaper. But if we continue to lose ground to China in categories where we used to have an advantage, what will happen to our manufacturing units? And more important, what will happen to lakhs of people working in those units?” says an executive with a Ludhiana-based cooperative bank.
source: http://www.business-standard.com / Business Standard / Home> Economy & Policy> News / by Mayank Mishra / New Delhi – September 27th, 2014