Kolkata: Umbrella industry sees Budget through China prism

KOLKATA: Finance minister Nirmala Sitharaman’s proposal to hike duty on umbrellas to 20% and withdraw the exemption will lead to a rise in the price of two- and three-fold women’s umbrellas as well as garden umbrellas that are currently imported from China.
But umbrella manufacturers in Kolkata said the move would give a fillip to the local component industry, although a bulk of the fabric will continue to be imported from China.
Netizen Sanam Sutirath Wazir remarked, “Diamond hua sasta aur umbrella mehanga... Kyunki baarish to kabhi-kabhi aati hai . Diamonds are forever.”
Umbrella Manufacturers’ Association president Hemant Paul said that the revised taxes would push up the prices of two- and three-fold umbrellas that are currently imported from China. Garden umbrella prices will also rise as the frames are imported from China.
“Indian fabric has more longevity. But it will take a while to replace the polyester and nylon fabric imported from China because only around 30% of the fabric can currently be sourced in India. Imports that will get replaced are ribs, tube, folding stick and handle. While Chinese components are more price competitive now as Customs duty on those components increase from 5% to 10%, the cost differential with components manufactured in India will reduce,” said Paul .
Bengal is the hub of umbrella manufacturing for the country, churning out more than 1 crore umbrellas a year. Suresh Banthia, director of Citizen Umbrella, said: “In Bengal, umbrella-making is a cottage industry. There is local capability of manufacturing components. But the low duty structure that existed earlier had left them disadvantaged since China offers an export rebate of 13%. With that handicap now gone, local components will become more competitive and that will help the industry.”