 "Lok Sabha polls: Jalandhar's sports industry looks to start a new innings")
Shivesh Yadav, 58, a rickshaw puller in Jalandhar’s Basti Nau, was heard arguing with a customer over the money that the customer owed. When asked about the flaring tempers, he said: “There are fewer people visiting this place now. We have barely any business.”
Pulling the rickshaw through the dusty street, he bemoans the lack of customers. “Before the online business, this used to be a bustling market. You wouldn’t be able to tell a Sunday from a Monday. We heard about this place in Bihar and came 25 years ago. Now, the situation is such that we have to go back during some months because the business is so bad.”
The origins of the Jalandhar sports industry can be traced to partition. In 1947, people shifted from Sialkot. Initially settled in Batala, these people moved to Jalandhar and Meerut, where raw material was easily available. The industry in Jalandhar was thriving until the pandemic came.
“Covid was a major blow to us. And even after four years, we have not reached the pre-pandemic levels. Although things have recovered, they are far from what they were, and we expect the new government to look into the matter,” says Dheeraj Kumar, general manager, Spartan.
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GST and policy woes
A major problem cited by the industry is the variable goods and services tax (GST) rates.
“We want the new government to make the rates consistent. As of now, they vary across 5, 12 and 18 per cent. The future of a lot of children depends on sports. If we are supported, we can give them more benefits,” says Kumar.
“The problem is that it is considered an entertainment tax. If we provide skipping or gym items, they fall under ‘entertainment’. These should be classified as ‘health’ products,” he adds. A new rule introduced in the Finance Act, 2023, has also ruffled some feathers in the industry. Section 43B(h) of the Income Tax Act has been designed to make sure small businesses are paid (refunds) on time. It allows companies to get tax breaks if they pay their small business suppliers within the time limits set by the MSMED (Micro, Small and Medium Enterprises Development) Act, 2006.
It also states companies must pay within 45 days if there is an agreement and within 15 days in the absence of such a pact. If they do not meet these deadlines, they cannot deduct these expenses for tax purposes.
“I send my materials to Odisha. The fastest route to Odisha takes 25 days. After all the formalities, the firm gets the material after a month. The problem is: How can anyone pay within 15 days if they are getting the material after 30 days? The rule is fine but it needs to be worked on,” says an exporter.
China dependence
Dependence on China is another factor the industry hopes to change after the government is formed after the June 4 results. According to the data from the Ministry of Commerce, sports goods from China worth ~918.72 crore were imported between February 2019 and April 2020, which is more than 65 per cent of the amount imported into India from all over the world.
“A number of people are getting raw materials or final products from China and selling them under their brand name.
Take the example of Yonex. Despite being a Japanese company, it has factories in China. A number of successful players in the badminton industry in India have been finished by Yonex,” another trader said. Some recount the brand Silver, a sports goods maker in India. Traders say Silver’s racquets were synonymous with badminton and available in every store in the country.
“Yonex put Silver out of business because it realised what India needs,” the aforementioned trader said.
Raw material and labour shortage
Domestic manufacturers, who export mainly hockey sticks and balls, cricket bats and balls, boxing equipment and chess boards, among other items, depend to a great extent on raw materials from China.
“The willow is brought from Kashmir and that’s expensive. A lot of raw material is available in Meerut because the state incentivises them. Over here, there is barely anything. The Aam Aadmi Party government promised to set up a research and development centre here but nobody has heard of it since. If we want to become exporters of the highest quality, we also need to match the standards set in Europe and the US,” says Nakul, a shopowner in Nau Basti.
Yadav points out another reason for the dwindling fortunes of the Jalandhar sports industry -- it may be the reverse migration of migrants within the country.
“The biggest problem is that the industry is never a vote bank,” Nakul adds.