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The dragon comes calling to the Ludhiana market

The dragon comes calling to the Ludhiana market‘Made in China’ garments are flooding the Ludhiana market and this has considerably perturbed local manufacturers who are seeking protection against these cheaper imports from China.

Chinese invasion to erode domestic market

Manufacturers in Ludhiana are concerned that if ChineseThe dragon comes calling to the Ludhiana garments continue to flood Indian markets, they will not only erode the domestic market but also ruin the government’s ‘Make in India’ initiative. Indeed, the arguments put forth by these manufacturers are quite valid as China is sending all its products — finished garments and cloth — through Bangladesh as India has a free trade agreement with it, thereby enjoying cost advantage. These two countries have already captured the Mumbai, Ahmadabad and Chennai markets, and before they ruin even the Ludhiana market, the government need to take some serious action against them.

Conniving custom officials add to woes

The Ludhiana market is also plagued by the actions of the Custom Departments as some custom officials are conniving with middlemen to smuggle garments from China and make them available to local dealers at much cheaper rates. A Chinese garment, that has a duty of Rs 400 per piece on it, is being made available to these dealers at Rs 60 duty per piece in addition to its original price.

Though it is unfair to label the entire customs department corrupt, a credible report indicates fixing the actual price of a garment is becoming increasingly difficult with the entry of grossly undervalued Chinese goods at Indian ports. Under-valuation’ implies the existence of ‘identical’ or ‘similar’ non-Chinese goods in Indian market the value of which is either at par, above or below the Chinese goods.

Hence, to access the actual price or value of an imported and undervalued Chinese goods, government officials have to compare and contrast between Chinese and non-Chinese goods. However, with a Chinese monopoly in the Indian market, in which there doesn’t exist any other foreign country or indigenously-produced goods for comparison, it is difficult for the customs officials to legally prove that the imported Chinese goods/consignments are under-valued.

Consequently, most cases remain unresolved resulting in loss of customs revenue affecting the state exchequer. The sheer volume of these Chinese flooding India with inferior quality, cheap, fast-moving consumer goods is humungous.

A pat on its back

Though India is fully aware of this, it can do little about the situation as the Chinese are fully exploiting the loopholes in the Indian political and legal systems to make huge profits. The Indian industry is under an existential threat, as not only is sovereign India’s territory being violated in a big way, India too is being taken for a ride by the Chinese.

Therefore, the objections raised by Ludhiana industrialists against Chinese brands are perfectly valid and reflect the spirit of a majority of Indians across the country. Ludhiana therefore, needs to be lauded for speaking its mind pertaining to China’s monopoly over the Indian market.

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