Urge the government to take strict anti-dumping measures
Indian small and medium enterprises (SMEs) are feeling the heat of competition in the domestic market from rising Chinese imports.
A recent survey done by the Federation of Indian Chambers of Commerce and Industry (Ficci) said Chinese manufacturers are offloading their products — which are 10-70 per cent cheaper than Indian products — in India.
“Trade and industry have reported that with Western markets losing their appetite for imports, Chinese manufacturers are increasingly looking at alternative markets to offload their wares. India is an obvious first choice given its geographical proximity and the fact that it is still growing at an appreciable 6.5 to 7 per cent rate,” the survey added.
Industries that have been impacted by this “onslaught” include processed foods such as honey; light engineering goods like power presses, welding machines and printing machinery; heavy engineering goods such as high-speed diesel engines; chemicals and chemical products such as soda ash and ammonium chloride; and metal products like auto components, the survey pointed out.
SMEs have asked the government to take strict anti-dumping measures to stop cheaper Chinese imports. They have urged the government to clear quality and safety norms for Chinese imports.
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The survey noted there has been a 75 per cent rise in Chinese imports, eroding the market share of Indian companies. Indian SMEs are apprehensive that as the Chinese government gives more incentives to boost exports, imports into India would only increase.
While competing with Chinese products on the price front may not be an easy task, many Indian companies that participated in the survey drew attention to quality- and safety-related aspects of Chinese products.
Immediate imposition of severe testing requirements on imports from China is a must, since these include basic items of consumption and even vaccines, respondents said.
These enterprises are apprehensive that as the Chinese government gives more incentives to boost exports, imports into India would only increase.
“The government’s initiatives for mitigating the hardship of SMEs have not really percolated down to the firm level,” the survey noted.
Ninety-four per cent of the respondents reported that their overall business has been affected “severely or moderately” due to the economic slowdown, with just five per cent saying they were not at all affected.
The participating companies indicated they have lost most of their major markets, primarily in Europe and the United States, and are struggling to find new ones.
In order to provide immediate respite for the SME sector, the participating companies felt that lowering the cost of financing and additional fiscal support from the government was urgently needed.
Other suggestions include faster processing of loan applications, government support for technical upgradation, setting up of more training institutes to provide skilled manpower, availability of quality control facilities close to the clusters and increase in DEPB rates.
The Ficci survey received responses from 116 SMEs manufacturing a diverse range of products from 20 locations across the country.