ASSOCHAM

INDUSTRY/ECONOMY

Holi brings no cheers to local SMEs -

 

ASSOCHAM

(India celebrates Chinese Holi)

An array of Chinese coloured powder and squirt guns have ignited attrition in small and medium industries (SMEs) at over 75 per cent ahead of the India’s biggest festival ‘Holi’, reveals the ASSOCHAM survey.

 

A sharp decline in SME units is forcing widespread job losses in the sector estimated to be over 8-10 Lakhs people, reveals an ASSOCHAM survey SME units who are reeling under onslaught from China.

 

To find out the extent of demand and supply for herbal colours and Chinese Holi accessories, ASSOCHAM Social Development Foundation (ASDF) conducted a random survey of about 1,000 Holi colour manufacturers and shopkeepers at Allahabad, Agra, Hathras, Mathura, Vrindavan, Delhi-NCR, Kanpur, Lucknow, Varanasi, and Patna during the months of January and February 2013.

 

The survey further reveals that full time and part time workers who have lost their livelihood nearly 8-10 Lakhs. Even the owners of SMEs have continued to lose the business with loss of capital and even indebted to bankers and money lenders creating further pain for them.

 

While releasing the survey ASSOCHAM Secretary General Mr. D S Rawat said that such items which can be easily manufactured here with the zero technology should be discouraged through restrictions on imports.

 

“Nearly 1,000 SMES units have closed so far in the last 2-3 years with the rise in imports from China. The manufacturers mainly from Allahabad, Brij Mandal (Agra, Hathras, Mathura and Vrindavan), Delhi, Kanpur, Lucknow and Patna have closed down”, added Mr. Rawat.

 

“For the past 5 years, the business of local sprinklers is decreasing due to stiff competition with Chinese sprinklers. They are facing huge loss, from small plastic sprinklers to colourful perfumed sprays made in China are available in the market”, said a local manufacturer and trader of sprinklers.

 

The only source of income that they have is by preparing toys, plastic goods and seasonal business of sprinklers but this invasion is causing a great threat to their daily earnings, added Mr. Rawat.

 

“At present, only 12% of the total produced sprinklers have been sold and we still have to meet the cost of manufacturing”, added the manufactures.

 

A wholesaler or plastic toys and sprinklers opined, almost all the chinese products of holi have been sold out and local products that were purchased from manufacturers in low quantities are still remaining in the stock. The last year, the ratio of sale of Chinese and Indian sprinklers was 80:20 but this year this ratio has changed to 95:5, reveals the survey.

 

Growing at a compounded annual growth rate (CAGR) of about 20 per cent, the Holi colour and accessories industry is likely to reach Rs 15,000 crore this year, apex industry body ASSOCHAM said today. Last year, Holi colour and accessories industry was about 12,000 crore.

 

The Holi accessory industry consisting of water guns, water balloons, cannons and toys is likely to reach Rs 10,000 crore this year and herbal & perfumed colours industry is also likely to touch Rs 5,000 crore this Holi.

 

“The Chinese sprinklers are comparatively expensive but they are available in different prices ranging from Rs 10 to Rs 1000, and fit the budget of people from all economic background”, shares 75% of the retailers. On the other hand, the traditional plastic sprinklers are selling from Rs. 5 to Rs. 50 still urban people are not buying thee local products and that is why we are preferring to sell the stock in villages, adds the majority of retailers.

 

Most of local sprinklers sellers have put a paper tag of “Made in China” to attract the maximum customers, added 75% of the retailers

Chinese sprinklers are innovative as compared to local, they come in various shape and sizes, from the replica of a soft drink to funny goggles, elephant, cartoon characters, flute, watch, mobile phone which spray colours mainly attract children, adds the survey.