The survey said Chinese products were more "innovative" and were cheaper by up to 55 per cent, due to which they were outselling the ones manufactured locally in states like Uttar Pradesh, Rajasthan, Madhya Pradesh and Gujarat.
"Invasion of innovative and fancy Chinese Holi toys and colours despite the central government's efforts to promote 'Make in India', is making survival difficult for small manufacturers, most of whom have been engaged in this business for decades and are now facing losses to the tune of a whopping 75 per cent as only about quarter of their products find favour with customers," said the survey conducted by Assocham Social Development Foundation.
According to the survey carried out among over 250 manufacturers, suppliers and traders, a majority felt traditional 'pichkaris' have almost disappeared from markets due to minimal consumer interest, while 'Made in China' Holi toys and colours were preferred by customers as they were much cheaper.
Many respondents also rued rampant use of harsh skin-damaging chemicals like acids, alkalis, diesel, engine oil, glass powder and mica apart from cheap quality of plastic being used to manufacture low-cost water guns.
As per a rough estimate by Assocham, every year over 5,000 colour manufacturing units produce over 5 lakh kg of gulal to be used on Holi across India out of which 2 lakh kg is used across Uttar Pradesh alone.
The industry body has also urged the Uttar Pradesh government to promote 'Holi Tourism,' across the state where it was celebrated with great zest by locals and tourists alike.