Rising Chinese imports threaten 25 lakh jobs in domestic furniture industry: Study

Furniture imports into India are growing at 27% annually while furniture exports from the country are growing at a growth rate of about 18% according to ASSOCHAM

July 16, 2014 10:02 IST | India Infoline News Service
With US$447mn worth annual furniture imports into India, China accounts for 53% of India’s total furniture imports worth over US$736mn thereby giving severe competition to the domestic industry, according to a just-concluded ASSOCHAM study.

“Furniture imports into India are growing at 27% annually while furniture exports from the country are growing at a growth rate of about 18%,” 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 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% 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% 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% of total employment generated by registered furniture sector in India.

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

Considering that the private final consumption expenditure on furniture in India has been growing at a compounded annual growth rate (CAGR) of about 17% (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.

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