The government has stepped up its efforts to boost the ‘Make in India’ initiative in furniture manufacturing and has clamped down on import of furniture items from China by imposing BCD (Basic Customs Duty) of 25%. The EPCH had requested to impose higher customs duty on import of handicrafts items and furniture from China. The steps taken by the government has been appreciated by the industry fraternity; they are bullish about the domestic consumption. Many of manufacturers reported that now they will be able to compete with the imports on price point.
Domestic furniture makers say that India imports furniture from China, Taiwan, Malaysia, Indonesia and many other European countries such as Italy and Spain; however, the major import is from China. Despite having good quality product, the demand for locally manufactured furniture takes a beating due to cheap Chinese imports. Now after imposing the import duty (25%), the demand of domestic furniture will increase and the anti-China sentiment from across the globe will also help the domestic manufacturers on the exports front.
“If we have to boost the industry and indigenous manufacturing, sales and market, imposing restriction on import of furniture from China is a welcome step by the Government in post-Corona period,” said Mr Bharat Dinesh, President, JEHA, Rajasthan. “It will indirectly benefit to our country by generating employment, saving foreign currency and boosting domestic manufacturing. However, it is a temporary relief. To sustain competition from across the globe for long time, we will have to upgrade our systems, technology and manufacturing process to increase our productivity as well as quality and finishes of goods,” he added.
“It will open the roads for Indian furniture machine manufacturing and force them to upgrade their offerings to match the international quality,” said Mr Shah. Indigenous technology is not very effective in furniture manufacturing, so to support the demand from overseas markets and match the international quality, India will have to import advance technology. “In office furniture nearly 60% of total import is from China. The hardwood furniture import does not have big share; but if Chinese furniture becomes costlier then people will divert to hardwood furniture and ask for quality and better finishes. In my observation, there will be nearly 125% growth in indigenous sales next year and it will considerably boost the local manufacturing also,” Mr Bharat Dinesh added further.
The sources revealed that the industry is also facing a massive problem of under-invoicing, where the value of the goods being shipped into the country is shown to be lower than the actual import price, denying customs duty to the exchequer. Industry players say that office furniture was largely ‘Made in China’ and suffered from poor quality. According to commerce department in the FY 2019-20 up to Q3 the imports were estimated at around Rs 8,300 crore, of which Chinese shipments were about Rs 4,812 crore. In 2018-19, furniture imports (including bedding and mattress) were estimated at around Rs 12,500 crore.
Mr Mohit Mehnot, Director, Tirupati Exocrafts, said, “It is very good sign for manufacturers based at Jaipur, Jodhpur, Moradabad, Saharanpur and other readymade furniture across the country. Despite having better quality than the Chinese, we were not able to match them at price point; now we can compete with them. It will benefit the Indian furniture manufacturing of all kinds as they will be able to provide quality products at competitive prices to hotels, restaurants, hospitals, schools, and any other projects. The customers will also be benefited with better after sales service with local manufactures.”
“People will be ready to spend more because they will be buying solid wood. The kind of furniture that was coming to India from China will not be available cheaply. Next year, the growth will double; for six months there will be a lot of issues before the industry in terms of capital, labour and demand in the market,” he added. '
Mr Manish Jhanwar, Director, Cross Country, Jodhpur said, “Around 3500 containers of Jodhpur handicraft furniture is being exported and local consumption is approximately worth Rs 2,000 crore; in my observation by next year, the numbers will double. The sentiment from across the globe is against China and its benefit is coming to us. In just 10 day we have received many enquiries from different countries who were otherwise buyers from China. After opening the market we have finalised one project and three are in pipeline. But, I would like to say that to win that quality level of projects we have to upgrade in terms of machinery and technology. Without it the industry will not be able to match the competition; so at present Government should support by giving subsidies and benefits in factory operations.”