In the absence of an adequate export duty drawback facility and obsolete technology, the sewing machine industry in Ludhiana losing its business to its Chinese and Taiwanese counterparts.
As sewing machines equipped with better technology and cheaper rates are available in China, the export prospects of domestic sewing machine industry have suffered badly.
Ludhiana Sewing Machine Dealers and Assemblers’ Association former president Virender Rakheja said, “The production levels of sewing machine industry in Ludhiana have remained stagnant at around 15 lakh machines for the last five years annually while the export figure has hit its lowest ebb in decades. Of the total production volume of domestic sewing machines (around 15 lakh annually) as much as 25% was exhausted by exports to Middle East, Africa, Afghanistan and Pakistan five years ago while rest of it was circulated in the Indian market, today that export figure of domestic sewing machines has come down to 5%.”
Rakheja added, “Except umbrella sewing machine (TA-1) which is the only auto-lubricating machine and serves domestic as well as industrial purposes is manufactured in domestic market while rest all industrial machinery is imported from China and Taiwan. The annual turnover of domestic machine was Rs 5,000 crore in 2011 which has come down to Rs 2,500 crore now. While of the total export turnover figures for domestic machine was at Rs 1,250 crore (as mentioned above 25% of total volume) has hit its steepest low in decades to Rs 250-300 crore (5% of total turnover) now.”
“The downward trend can directly be attributed to the government’s obsolete policy formulations with regard to sewing machine industry in India which had been outpaced by China with heavy spending on technology and relaxations in terms of subsidies and tax levies,”said Rakheja.
The sewing machine industry in Punjab alone accounts for a hefty 80% contribution to the total business generated in country. Currently there are more than 1,500 small and large units operating in Punjab, around 1,000 of them are stationed in Ludhiana. The price for the domestic machine begins from Rs 2,000 and the expensive most machine in this segment can be bought for Rs 6,000 while that of industrial sewing machine cost around Rs 15,000 to Rs 5 lakh. Sewing machine industry in Ludhiana is mostly sprawling in areas like Chaura Bazaar, Focal Point and Miller Ganj among others.
Ludhiana Sewing Machine Association chairman Dalbeer S Dhiman said, “The cheap import from China and Taiwan has infested fatal wounds to the domestic sewing machine industry. Although not on par with Japanese technology in sewing machine industry, China as aptly adapted to global market trends to cater to a large share of international market today. Besides investing hugely on technology, China has kept the pricing of sewing machine in control, taking its toll on Indian market, as a result our export figures went down. Rise in steel prices has put additional burden on domestic sewing machine industry. Volatility of raw material prices had also been affecting the sewing machine industry here.
Arjun Auluck, general manager, Ludhiana-based CRA Pvt Ltd, said, “Owing to lack of proper incentives and meager 5% export duty drawback, the vast potential for white sewing machine in the industrial machine segment remain unexploited. It lies with the government that if they want to thrust the growth of sewing machine industry they need to treat it on par with other corporate sectors while transferring tax benefits, subsidies and incentives. Our neighbour China has an edge when it comes to export as their government in order to bolster export dispenses a hefty 15% export duty drawback besides investing in technology upgradation.
To cater to a potential market base in Middle East countries, we are planning to embark on white machine manufacturing in India soon. Manufacturing industrial machine with sizeable market potential both in Indian as well as overseas market is undoubtedly a lucrative proposition but without any relaxations from government’s end, we are apprehensive whether the decision would bear its fruit.”