Chinese imports threaten India's largest non-farm employers

Micro Small amp Medium Enterprises MSMEs are by far the largest nonfarm employers in the country employing more than 110 million people While MSMEs have been growing at a consistent rate contributing significantly to Indiarsquos GDP amp exports they face a threat from cheap Chinese imports according to Factlyin a data journalism portalAn Indiaspendorg storyMSMEs ndash Number amp EmploymentAccording to the 201415 annual report of the Ministry of Micro Small amp Medium Enterprises the number of MSMEs and the employment generated by them have been increasing consistently The number of MSMEs has increased by about 20 to 488 million in 201314 from 411 million in 200910 The employment generated by the MSMEs has also grown on similar lines to 1114 million in 201314 from 922 million in 200910 representing a 21 increaseEmployment Generated In Micro Small amp Medium EnterprisesSource FactlyinThe average number of employees per establishment hasnrsquot changed much in the five years from 200910 to 201314 It has remained more or less constant at around 23 employees per establishment While this may not be very high a large number of these enterprises are oneman establishmentsAverage No Of Employees Per MSMESource FactlyinSpread in the StatesAs expected the top 10 in terms of the number of MSMEs is dominated by the larger states with Uttar Pradesh at the top with 44 million MSMEs West Bengal has around 37 million followed by Tamil Nadu 33 million Maharashtra 31 million Andhra Pradesh 26 million in the top five The other states in the top 10 are Kerala Gujarat Karnataka Madhya Pradesh amp Rajasthan The only notable exception in this list is BiharStates With Largest No Of MSMEs in millionSource FactlyinAccording to the fourth All India Census of MSMEs more than 92 of enterprises are in the unregistered sector and these account for more than 81 of employment Less than 8 of the enterprises are in the registered sector accounting for more than 18 of employmentShare in GDP amp exportsThe contribution of MSMEs to the countryrsquos GDP amp exports is significant According to the MSME ministry the estimated contribution of the MSME sector to the GDP has been more than 35 consistently from 200910 to 201213 While it was 36 in 200910 it has grown to 375 in 201213Contribution Of MSMEs To GDP Source FactlyinBased on the export data maintained by the Director General of Commercial Intelligence amp Statistics the share of MSMEs in Indiarsquos total export has been more than 40 in the past 3 years From 43 in 201213 it has grown to 447 in 201415 MSMEs contribute nearly half of Indiarsquos exportsShare Of MSMEs In Indias Total Exports Source FactlyinThe Chinese Import ThreatIndiarsquos trade deficit with China has been on the rise on account of decreasing exports and increasing imports The trade deficit in 201415 has gone up to 485 billion Indian MSMEs also face tough competition from cheap Chinese products as is evident in the high growth of Indiarsquos imports from ChinaIndias Trade Deficit With China billionSource FactlyinAs per information compiled by the Director General of Commercial Intelligence amp Statistics in 12 major product groups largely manufactured by MSMEs in India imports from China grew at a higher rate than their respective imports from all other countries combined during 201112 to 201415 These 12 product groups accounted for 74 of Indiarsquos total imports from China in 201415 and a significant proportion of Indian MSMEs seem to be adversely affected from Chinese importsThese 12 product groups pertain to electrical and electronic goods mechanical and metallurgical products on the one hand and chemical glass amp ceramicsbased products on the otherThe government on its part has been imposing antidumping duties permitted under the World Trade Organization WTO for restricting imports when such imports have been established as unfairly affecting the market for goods and services produced by Indian industries As per data available with the Directorate General of Anti Dumping and Allied Duties DGAD around a quarter of all the cases initiated since 1994 are against China Till June 2014 a total of 166 such cases of antidumping duty have been initiated against China and duty has been imposed in 134 such casesWith regards to taking any strict action India seems to be bound by the WTO framework While India has initiated certain actions such as mandating BIS certification for certain products amp prohibiting import of mobiles without an IMEI number a lot more needs to be done if this threat has to be countered There has to be a greater focus on exportoriented sectorsDubbudu has been working on issues related to the Right to Information for a decade He is a datainformation enthusiast amp is passionate about governancepolicy issues Factlyin is dedicated to making public data meaningful