2 reasons why India's umbrella makers are happy

First, the industry is hoping for brisk business, as, according to projections there will be normal monsoon.
Secondly, it is relieved at the fall in import of cheap umbrellas from China which had dented the domestic market for several years.

Umbrella and rainwear makers are expecting a good business this season as monsoon projections appear to be normal.

They are also relieved at the fall in import of cheap umbrellas from China which had dented the domestic market for several years.

However, till now, orders from retailers are slow due to a financial crunch in the segment and delay in the onset of monsoon.

According to industry players, India’s umbrella demand is estimated between 12 and 15 crore pieces per annum, although varied estimates are being put forward for the market size.

Almost a fifth of the umbrellas sold in India were imported from China three years ago and that too at very cheap rates.

However, rising labour cost in China along with cost of other materials and local authorities’ anti-pollution drive led to a rise in cost.

Now, umbrella import from China has reduced to 7-8 million a year.

With the rupee depreciating in the last two years, there has been a fall in overall imports.

“For umbrella making, 36 components are required and a large part of these are imported from China, despite a fall in readymade umbrellas,” said Rajesh Chopra, ex-president, Umbrella Manufacturers & Traders Association and founder, Sagar Sons, an 80-year-old firm in the industry.

He, however, said the cost has increased by 20 per cent following high wages and raw material prices which are being passed on to consumers.

Chopra added that 12 per cent GST should be reduced as this is largely a poor man’s product.

The umbrella industry in India is scattered and largely remained a part of the small scale sector.

Even trade is seasonal and hence small shops and hawkers play a big role.

“This is a seasonal product and a high employment generating one. So, the government should focus on increasing exports.

"India is capable of capturing European Union and US markets which are currently dominated by China,” said Naresh Banthia, managing director, Citizen Umbrella, one of the largest manufacturers in the low and mid-end markets.

Big brands in the business are Poppy Umbrella and Johns Umbrella from Kerala, KC Paul and Citizen from Kolkata and Sagar Sons (maker of the Happy brand) from Mumbai.

Low-end umbrellas and rainwear are made from polyester while for high-end ones, nylon is used.

Some high quality nylon is also imported from China and Taiwan.

The weakening rupee is making this import costlier in India.

Rainwear makers also complain of the rising cost, which has led to product prices going up 15-20 per cent across-the-board this season.

Umbrellas with silver coating on the inner side are also marketed as summer products due to their ability to protect from the heat.

Shantilal Chheda of Eastern Rainwear, makers of Top in Town brand, said, “Apart from the rising cost, other issues that worry the industry are the differential rates of GST.

"For cheaper and low and mid-end market rainwear made from polyester, GST is 18 per cent while high-end goods made using nylon attracts only 5 per cent which is largely used by upper class.

"This issue needs to be addressed.”

Photograph: Rupak De Chowdhuri/Reuters