An ASSOCHAM survey revealed a sharp decline in SME units in this sector. It is estimated that eight to ten lakh people from this sector will lose their jobs.
The rising demand for imported sprinklers, scented colours and other accessories from China are considered to be the main reasons for the negative impact on the domestic colour and Holi accessories manufacturers.
The ASSOCHAM Social Development Foundation (ASDF) conducted a random survey of about 1,000 Holi colour manufacturers and shopkeepers in places like Delhi-NCR, Agra, Allahabad, Mathura, Vrindavan, Kanpur, Lucknow and Patna during the months of January and February 2013.
The survey found that SMEs in this sector have been losing business, and are indebted to bankers and money lenders, creating further pains for them.
The owner of a small Kanpur-based manufacturing unit for sprinklers and colours, Santosh Kumar Pandey, says, “These days, we are struggling just to survive in the market. In the last three years, our business has come down drastically to 40%. Retailers are not showing interest in our products, as the market is getting a variety of products from our Chinese counterparts.”
“ Colourful perfumed sprays are also getting imported from China, which has swallowed our market,” says Pandey.
Highlighting this trend as a major problem for domestic manufacturers, DS Rawat, Secretary General, ASSOCHAM, says, “The import of such items, which can be easily manufactured here with zero technology, should be discouraged. This can be done through restrictions. Nearly 1,000 SME units have closed in the last two to three years because of the rise in imports from China. Manufacturers from Allahabad, Brij Mandal (Agra, Hathras, Mathura and Vrindavan), Delhi, Kanpur, Lucknow and Patna have largely been affected.”
“This year, more than 60% of my production remained unsold in the Holi season,” says Pandey.
Growing at a compounded annual growth rate (CAGR) of about 20%, the Holi colour and accessories industry is likely to reach a size of Rs. 15,000 crore this year, ASSOCHAM said. Last year, the size of the industry was estimated at about Rs. 12,000 crore.
The size of the herbal and perfumed colours industry is also likely to touch Rs. 5,000 crore this year.