Stuck payment, discount: China puts Indian hair exporters in tough position

China has put Indian hair exporters in a tough position as Beijing has not released a payment of Rs 300 crore against their exports. Moreover, Chinese buyers, who account for 80 per cent of Indian hair exports, are asking exporters to ship hair at a discount of 40 per cent, reported The Economic Times on Tuesday. 

The 40 per cent discount being asked by China will put pressure on the margins of Indian exporters, who sell hair at an average price of $150-$200 per kg. 

“Many hair exporters have sent hairs to China without letter of credits. They have sent the hairs to third party bonded warehouse. Chinese buyers bought hairs from these warehouses. But in the process, the Indian exporters have not got their money. This has happened to exporters across India, but the worst affected have been those who are from West Bengal,” Sunil Eamani, member of Human Hair and Hair Products Manufacturers and Exporters Association of India and CEO of Indus Hair Extension told ET. 

West Bengal is the major hub for the industry in India, followed by Andhra Pradesh, Tamil Nadu, and Telangana. For the global beauty market, raw human hair is mainly collected from households and temples in these states. 

Two types of hair — Remy and non-Remy — are collected from these states. While Remy is best-grade hair collected from temples, non-Remy is a household waste collected by small groups of people. 

India exports non-Remy hair to China. The US is the biggest market for human hair products which are popular among African Americans, Orthodox Jews, and fashionistas. 

Speaking on the payment issue, Washim Akram, owner of West Bengal-based SAM Hair Exports, told ET, “We are pursuing with buyers in China, but with no result. We do not know when we will get our payment.” He added that now China is asking for a discount that is 'putting pressure' on exporters' margins. 

The Indian hair export market is around $1.5 billion, he told ET.