Chinese imports threatening Indian furniture industry – Assocham

With $447 million worth annual furniture imports into India, China accounts for 53 per cent of India’s total furniture imports worth over $736 million thereby giving severe competition to the domestic industry, according to a just-concluded ASSOCHAM study.

“Furniture imports into India are growing at 27 per cent annually while furniture exports from the country are growing at a growth rate of about 18 per cent,” noted the study titled ‘Potential of Furniture Industry in India’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Australia, France, Germany, The UK and The US are leading destinations for India’s furniture exports while China largely dominates the furniture imports into India followed by Germany, Malaysia, Italy and The US.

“Growing furniture imports from China are threatening jobs of over 25 lakh people engaged in over 10.61 lakh registered and unorganized furniture factories across India,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the chamber’s study.

“Lack of modernization and innovative design, dearth of skilled labour, limited market access and lack of quality control are certain key issues restricting the growth of India’s furniture industry and also the main reasons non-operation of furniture factories,” said Mr Rawat.

Non-operation of furniture manufacturing factories in India is also an issue of grave concern to the domestic industry, evidently as of the total 1,419 registered furniture factories in India only 1,157 factories were under operation as of 2011-12 i.e. about 20 per cent of registered furniture factories in India were non-operational, highlighted the ASSOCHAM study.

Maharashtra is the leading state with 222 registered furniture factories followed by Tamil Nadu (201), Rajasthan (124), Andhra Pradesh (119) and Karnataka (112). The top five registered factories constitute almost 55 per cent of registered furniture factories in India.

“Registered furniture factories have more potential in terms of employment generation as on an average one registered furniture factory generates 40 jobs whereas an unorganized factory generates just about three jobs.”

Of over 57,000 jobs being generated by registered furniture factories across India, Maharashtra is numero uno in generating maximum of over 15,100 jobs followed by Tamil Nadu (9,318), Rajasthan (5,053), Karnataka (4,998) and Andhra Pradesh (4,087) with top five states accounting for about 68 per cent of total employment generated by registered furniture sector in India.

While Punjab has about 62 per cent of non-operative registered furniture factories followed by Haryana (60 per cent), Tamil Nadu (30 per cent) and Karnataka (25 per cent).

Considering that the private final consumption expenditure on furniture in India has been growing at a compounded annual growth rate (CAGR) of about 17 per cent (during 2004-05 and 2012-13), revival in real estate and hospitality sectors combined with rising disposable incomes will further drive the furniture industry’s growth in India, noted the study conducted by The ASSOCHAM Economic Research Bureau (AERB).

If the aforesaid issues are addressed effectively, then the sector has the potential to generate about five lakh additional employment opportunities during the course of next three years.