NEW DELHI: Rise in imports of such as umbrellas, toys, certain fabrics, and musical instruments are majorly affecting MSMEs as these products are also made by domestic companies, according to think tank Global Trade Research Initiative (GTRI).
India exported only $8.5 billion worth goods from January to June 2024 as per the report while imports increased to $50.4 billion, resulting in a trade deficit of $41.9 billion, making China India’s largest trade deficit partner.
GTRI founder Ajay Srivastava said,”China accounts for 29.8 per cent of India’s industrial goods imports. India must invest in deep manufacturing to cut dependence on import of critical industrial products from China.”
He said that cheap Chinese goods make it difficult for MSMEs to sustain in the market, leading to struggles for survival.
“Some MSMEs have to shut down or reduce their operations, and they find it hard to grow due to the easy access to low-cost Chinese products. These challenges affect job creation and economic growth in India,” Srivastava said.
The GTRI data analysis stated that India gets 95.8 per cent of its umbrellas and sun umbrellas ($ 31 million) along with 91.9 per cent of artificial flowers and human hair articles ($ 14 million) from China.
In addition to this, glassware ($ 521.7 million, 59.7 per cent), leather articles including saddlery and handbags ($ 120.9 million, 54.3 per cent), and toys ($ 120.2 million, 52.5 per cent) are seeing a similar trend, severely impacting domestic manufacturers. Even in ceramic products ($ 232.4 million, 51.4 per cent) and musical instruments ($ 15.7 million, 51.2 per cent), where Indian artisans once thrived, the dominance of Chinese imports is displacing local production, it said.
Indian MSMEs struggle to compete in industries such as furniture, bedding, and lamps; and cutlery.
“These are sectors where Indian small businesses have traditionally been strong but are now losing ground due to the influx of Chinese goods,” it said, adding that products like articles of stone, and carpets are under a existential threat, diminishing the competitiveness of local producers.
According to GTRI’s data, silk import from China stood at $ 32.8 million, which contributes to 41 per cent of India’s total imports of silk during January-June 2024.
Srivastava said that India needs to invest in deep manufacturing on an urgent basis to reduce its reliance on critical industrial imports, especially from China.
“The heavy reliance on Chinese imports is eroding the market share and survival of Indian MSMEs. Strengthening domestic manufacturing is essential to protect these small businesses and maintain India’s economic independence,” Srivastava added.
India exported only $8.5 billion worth goods from January to June 2024 as per the report while imports increased to $50.4 billion, resulting in a trade deficit of $41.9 billion, making China India’s largest trade deficit partner.
GTRI founder Ajay Srivastava said,”China accounts for 29.8 per cent of India’s industrial goods imports. India must invest in deep manufacturing to cut dependence on import of critical industrial products from China.”
He said that cheap Chinese goods make it difficult for MSMEs to sustain in the market, leading to struggles for survival.
“Some MSMEs have to shut down or reduce their operations, and they find it hard to grow due to the easy access to low-cost Chinese products. These challenges affect job creation and economic growth in India,” Srivastava said.
The GTRI data analysis stated that India gets 95.8 per cent of its umbrellas and sun umbrellas ($ 31 million) along with 91.9 per cent of artificial flowers and human hair articles ($ 14 million) from China.
In addition to this, glassware ($ 521.7 million, 59.7 per cent), leather articles including saddlery and handbags ($ 120.9 million, 54.3 per cent), and toys ($ 120.2 million, 52.5 per cent) are seeing a similar trend, severely impacting domestic manufacturers. Even in ceramic products ($ 232.4 million, 51.4 per cent) and musical instruments ($ 15.7 million, 51.2 per cent), where Indian artisans once thrived, the dominance of Chinese imports is displacing local production, it said.
Indian MSMEs struggle to compete in industries such as furniture, bedding, and lamps; and cutlery.
“These are sectors where Indian small businesses have traditionally been strong but are now losing ground due to the influx of Chinese goods,” it said, adding that products like articles of stone, and carpets are under a existential threat, diminishing the competitiveness of local producers.
According to GTRI’s data, silk import from China stood at $ 32.8 million, which contributes to 41 per cent of India’s total imports of silk during January-June 2024.
Srivastava said that India needs to invest in deep manufacturing on an urgent basis to reduce its reliance on critical industrial imports, especially from China.
“The heavy reliance on Chinese imports is eroding the market share and survival of Indian MSMEs. Strengthening domestic manufacturing is essential to protect these small businesses and maintain India’s economic independence,” Srivastava added.
