Hosiery Industry Stripped off Profits by Chinese Goods
Date : January 30, 2012
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Hosiery industry is in a spin over "Chinese apparel arriving through illegal channels", which is eating away into its profits. People connected with the industry, which has earned Ludhiana the title of "Manchester of India", say smuggled Chinese garments are cheaper as their suppliers avoid paying customs or excise duty.
President of Knitwear and Apparel Manufacturers Association of Ludhiana, said, "As per our estimates, Chinese garments control 60% of local retail market." He added they would ask the local MP to take up the issue with Centre.
The illegal inflow of goods from China is badly affecting Ludhiana's knitwear industry, which manufactures around 90% of the woollens in the country. It is estimated that the Ludhiana hosiery industry has an annual turnover of Rs 8,000 crore and Rs 1,500 crore of those are generated through export.
"Due to economic slowdown in Europe, China wants to sell its goods in India at throwaway prices. Owners of over 10,000 knitwear units in Ludhiana are having a tough time because of this," he said. He added, "the industry directly or indirectly employed around 3 lakh people."
Sources said smugglers took advantage of easy-to-cross India-Nepal border to bring their products to India as there were some routes there that did not have presence of customs. The Member of Parliament said, "I will raise the issue in Parliament during budget session. At the same time, industrialists should make efforts to stop this by adopting an anti-dumping mechanism in collaboration with Union Ministry of Commerce."
Indian manufacturers of sewing machines in the city are also having a tough time because of Chinese imports. President of Knitwear Club said, "In this industry, smuggling is not the issue. Machines manufactured by Japanese companies in China are attracting local workers in spite of their high prices as their quality is superior. If government does not help, our sewing machine industry won't be able to sustain itself."
The President of Knitwear and cotton Apparel Manufacturers Association said government should introduce goods and services tax, as at the moment they are forced to pay "double tax" in the form of central excise tax and value added tax leading high prices of products. "A decision on the issue would be taken by Union government. But we are also seeking support from local leaders, who come for our votes, to raise the matter with the Centre," he added.
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