Analysis of the sports goods industry of India

Introduction

The Sports Goods Industry was founded by Sardar Bahadur, Sardar Ganda Singh Oberoi in the twelvemonth 1883 at Sialkot and Sports Equipment became the first Indian Industrial Product to be exported in 1885.The Sports Good Sector consists of both organized and unorganised subdivisions of the industry. The Indian Sports Goods Industry therefore has its beginnings in Sialkot, Pakistan. When India got partitioned in 1947, many Hindu craftsmans migrated from Sialkot to Punjab and Uttar Pradesh in India. Jalandhar is the most primary Centre of India ‘s Sports Goods Industry followed by Meerut in UP and Gurgaon in Harayana.

India is one of the largest manufacturers of footballs and other hyperbolic balls. The Indian Sports Goods Industry has grown enormously since 1947. Some of the merchandises like Cricket chiropteran, ball, football and cyberspaces have been steadily deriving celebrity all over the universe.

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The Sports goods Industry has grown by springs and bounds in the past five decennaries and has contributed significantly to the Indian Economy by manner bring forthing employment, working the rural and urban potency and besides by manner of exports, which are increasing every twelvemonth.

The Indian athleticss goods industry manufactures more than 300 points. United Kingdom is the 1 of the major importer of athleticss goods manufactured in India followed by states like USA, Germany, France and Australia.

Some of the major points that are exported include inflatable balls, hockey sticks and balls, cricket chiropterans and balls, packaging equipment, angling equipment, indoor games like Carrom and Chess boards and some protective points.

The athleticss Goods Industry therefore provides a utile support avenue and has helped continue traditional accomplishments acquired over coevalss. As some keen athleticss merchandises require extremely skilled procedures to be followed for their production, the demand for skilled workers in the industry is even more outstanding inspite of the debut of machine-controlled systems.

After liberalisation of India and debut of the WTO understandings, athleticss goods sector is sing enormous competition from foreign trade names.

Presently, the industry in chiefly focused in the small-scale and bungalow sector backed by some of the authorities ‘s liberalized industrial policies. There is besides a broad range for bettering the selling of merchandises and overhauling the engineering used for fabricating them.

SPORTS GOODS INDUSTRY IN INDIA

The Sports goods industry is divided into assorted fabricating bunchs. We would be discoursing the bunchs of Jalandhar, Meerut and Kashmir in item as follows:

Manufacturing bunch of Jalandhar:

This bunch is called a transplanted bunch, as a major section of this bunch which was originally portion of Sialkot, Pakistan moved to Jalandhar on India ‘s divider. It is an of import provider of choice athleticss goods to more than 130 states including some of the developed states of the universe. The Jalandhar bunch is besides the merely bunch to present the construct of machine-stitched footballs to run into the demands of the FIFA universe cup 2010 and beyond.

Skilled workers engaged in this industry are the most of import parts elements in the production and are settled in cantonments next to the fabrication unit. The enterprisers puting up modern units with mechanised production systems are switching to open infinite with more country to accomplish better consequences and are off from crowded vicinities. The official estimation of the entire figure of individuals working in the industry in approximately 1,70,000 while the unofficial estimation is 3,00,000.

Fabrication CLUSTER OF MEERUT:

There are about 1250 registered and 2000 unregistered large and little athleticss goods fabricating units supplying direct and indirect employment to about 70,000 individuals in the Meerut District of Uttar Pradesh. Supporting organisations have besides grown to provide equal measure of natural stuffs to the athleticss goods industry and to supply preparation to the workers during the last few old ages. At the same clip many strategies are operational for the development of the bunch. If given the right concern chance to the athleticss goods makers, this bunch can boom.

The production is low because the units are non mechanized as merely 20 % of them use machinery. Besides latest engineering is non available which acts as a hindrance in regard of the competition from China, Pakistan, etc. About 60 % entire production is being exported to Australia, South Africa, England, America, West-Indies, New Zealand, Zimbabwe, Bangladesh etc. , through in-between work forces and the remaining merchandises are sold in the domestic market across India.

There are assorted authorities organic structures that help in the monitoring the advancement and development of the bunch. These are listed and described briefly as under:

Directorate of Industries, U.P. : This Government organic structure is back uping the bunch in every regard by supplying preparation, Technical Support etc.

Procedure cum Product Development Centre ( PPDC ) : It meets the proficient demands of athleticss goods industry throughout the state in coaction with Govt. of U.P.

All India Sports Goods Manufacturers Federation ( AISGMF ) : It supplies the information, engineering and proficient preparation to the Industry. It besides arranges the natural stuff for the Industry.

Export Promotion Bureau: It helps the little makers to roll up their merchandise in one platform or the other so that they could export their merchandise to other states on low monetary values.

Cricket Bats Manufacturing Cluster in Kashmir:

The history of cricket chiropteran industry in Kashmir goes back to pre-partition yearss when Sialkot ( Pakistan ) was the athleticss goods Centre. With the divider of the Indian sub-continent, the skilled craftsmen of Sialkot shifted to Jalandhar, Meerut and the cleft shapers of Kashmir turned toward freshly established centres. In due class of clip, the demand of the cricket chiropterans in the state increased and cricket chiropterans started acquiring manufactured to run into this demand.

The finest willow is English Willow, followed by Kashmir Willow for fabricating cricket chiropterans. Over 80 % of all cricket chiropterans today are manufactured in Jalandhar, Meerut, Kashmir and Jammu metropoliss. All of them depend on Kashmir for their willow clefts.

World celebrated Kashmir Cricket chiropterans industry is now confronting a slow decease. Cricket Bat Manufacturers Association revealed that out of a entire 300 cricket chiropteran fabricating units in Kashmir vale, half of them have shut their units. The cricket chiropteran industry is combating for endurance in the province. Jammu part, which boasted of 77 cricket chiropteran fabricating units a few old ages back, has now a mere 10 units, while the scenario in Kashmir vale is no different.

Major Sports Goods Production Centers/Clusters and Product Classs:

Major Sports Goods fabrication bunchs and major merchandise classs of athleticss goods produced are compiled in the undermentioned tabular array:

Sl. No.

Location/

Bunch

Major Product Categories

1.

Jalandhar

Inflatable ball ( Soccer /Rugby/Volley/Net/ Hand & A ; Basket ball ) in PU & A ; PVC

Boxing Equipment

Cricket Equipment

Sports ware

Path and Field Equipments

Sports Training equipment

Hockey Equipment

Hockey Foam Moulded Goalie Range & A ; Shipguards

All sorts of Gauzes

2.

Meerut

Weight Lifting Equipment

Cricket Equipments

Sports Equipments

Boxing Equipments

Table Tennis

Badminton

Carrom board

Fitness and Exercise equipment

Lane Markers

Basket ball

Netball rings

Terrestrial time accoutrements

Sports Apparel

3.

Jammu & A ;

Kashmir

Cricket Bats

4.

Delhi

Football

Carrom Board

Chess

Cricket Equipment

Billiards/Snooker/Pool Tables

Accessories

Football Bladders

Boxing equipment

Punching

Sports Helmets

Educational Puzzles

Board Games

5.

Gurgaon

Golf Equipment

Board Games

6.

Bombay

Water Park Slides

Carrom Board

Payground

Fitness Equipment

Sports Internets

Helmets

7.

Calcuttas

Jumping rope

Carrom Board

Magic fast ones & A ; magic apparatus

8.

Madras

Tennis Balls, Sports Shoes and Apparels

9.

Bangalore

Bowling Equipments

Sports Medals & A ; Trophies

Gym & A ; Health Equipments

Productivity Growth of Indian Sports Goods Sector

Indian athleticss good sector is a fast growth & A ; gross bring forthing sector. Industry is clustered chiefly at Jalandhar, Meerut and Jammu belt supplying high employment to locals. Industry is bolstered by high labor productiveness, low pay rates and high accomplishment sets of labour category involved. Indian athletics goods industry has Manichaean nature with inexpensive skilled labor as one pillar and hand-crafted merchandise being the other.

Sports Goods sector in India comprises of organized sector which is registered under FACTORY ACT 1948 and unorganised sector ( cottage industry ) scattered around athleticss zone of Jalandhar and Meerut. Recent globalisation and skilled labor has increased productiveness which resulted in important part of entire merchandise exported from India.

Fig. 1: Labor, Capital and Total factor Productivity Growth Indices

From the above graph we can reason that capital productiveness has increased but the same period witnessed diminution of labour productiveness and entire factor productiveness. This aspect requires high capital investing, FDI & A ; Research and Development for debottlenecking the growing and production.

Export Competitiveness of Indian Sports Goods Industry

Sports good market is confronting an all out competition with enlargement of Sporting giants like NIKE, ADIDAS, PUMA and REEBOK. Inspite of all these factors Indian athleticss goods industry has shown enormous growing. Improved operation schemes, aggressive selling and investing in Research and development has increased the quality production and stamped India as one of major provider of featuring goods in planetary sphere. The international market consciousness resulted in revamp of the industry, inciting better merchandise development and variegation tendencies.

Impact of above can be seen in dual digit growing rate ( in RS ) of Sports industry in last fiscal twelvemonth when other sectors where confronting growing crunch because of planetary recession.

Overall Export Performance of Sports Goods from India

Harmonizing to Sports Goods Export Promotion Council ( SGEPC ) total export value of Indian athleticss industry is estimations to be around Rs 586 crores. This shows twelvemonth on twelvemonth growing rate of 13 % .Top 5 performing artists which constituted for more than 60 % of the entire export value are Hammocks, Inflatable Balls, Boxing Equipment, Cricket Bats & A ; General Exercise Equipment. In this Hammocks recorded a monolithic growing of 76 % ( in Rs ) .

India ‘s Export of Major Sports Goods – 2002-03 to 2008-09

Country Wise Export of Sports Goods

Fiscal twelvemonth 2008-2009 proverb addition in export finish from 127 states ( 2007-2008 ) to 137 states ( 2008-2009 ) .Top 5 finishs includes U.S.A, U.K. , Germany, Australia, South Africa and accounted for 70 % of the entire export by industry.

India ‘s Export of Sports Goods – 2004-2005 to 2008-09 ( Rs in crore )

During period 2003-2004 to 2007-2008 Export and import Trade ratio shows that India was net importer of Table-Tennis equipments, Lawn Tennis and badminton rackets, Track and field ‘s equipments.During the same period India was a net exporter of Cricket balls, Hockey sticks, Cricket chiropterans, Fish maulerss and other line fish cyberspaces.

Recent GOVERNMENT POLICIES FAVOURING SPORTS GOODS INDUSTRY

In the past one twelvemonth, for the publicity of exports of athleticss goods from India and for the Common Wealth Games, some presentments and policy alterations have been implemented as below.

Trade Policy ( 2009-14 ) :

As per the trade policy of the continuance 2009-14, particular enterprises have been proposed in the Sports Goods sector. They are as follows:

For publicity of export of Sports Goods, import responsibility will non be levied on certain inputs used in the fabrication of Sports Goods.

The sector has been set at a high precedence under the MDA/MDI strategy. Besides particular financess have been allocated under the MDA/MDI strategy for publicity of exports in the industry. ( MDA or Market Development Assistance and MAI or Market Access Enterprises are fundamentally export publicity strategies set by the authorities. )

Sports good application should be considered for fast track clearance from Directorate General of Foreign Trade ( DGFT ) . DGFT is fundamentally a authorities organic structure that is exclusive responsible for preparation and execution of EXIM policy.

Sports Goods are to be entitled for higher inducements and be treated as particular focal point merchandises.

3 % Duty Free Import Scheme:

In order to advance export of Sports Goods from India, the authorities has given Custom Duty freedom on import of certain inputs required in the fabrication of Sports Goods. The freedom is fundamentally given to manufacturer-exporter of athleticss goods and is to the extent of 3 % of old old ages FOB ( Free on Board ) value of the goods exported by the maker.

The undermentioned goods have been exempted as per the above strategy:

( I ) Nylon intestine

( two ) PU or nylon clasp sheets for hockey sticks

( three ) Butyl vesicas for inflatable balls

( four ) Willow clefts, ash wood or beech wood

( V ) Cork undersides

( six ) Synthetic gum elastic vesica

( seven ) Manau Cane

( eight ) Table tennis gum elastic

( nine ) Table tennis chiropteran grips

( ten ) Table tennis blade

( eleven ) PU for inflatable Balls.

( twelve ) Extra investigator ( cricket chiropteran confronting tape )

( thirteen ) Resin hardener TTP-33S and let go of paper for composite hockey sticks.

( fourteen ) Table Tennis Glue.

( fifteen ) Evazote froth for protective equipments e.g. leg guards, thigh guards.

( sixteen ) Plywood for ricochet board.

( Referee: Custom Notification No.21/2008, 77/009 & A ; 21/2010 )

In the above list, the last six points have been added in the budget 2010. Besides the maker and exporters should be registered with SGEPC to avail the benefits of DFIS. ( SGEPC or Sports Goods Export Promotion Council is fundamentally a authorities sponsored organisation working for the betterment of exports of athleticss goods from India. Majority of the maker and exporters of athleticss goods in the state are represented by SGEPC. Besides the organisation acts as a nexus between the industry and authorities. It fundamentally transfers the aid provided by the authorities to the industry and returns back feedback of the industry to the authorities. This feedback helps the authorities in explicating Export Import policy ) .

Exemption of Custom Duty on Import of Sports Goods and Necessities:

The ministry of Finance on 19th January, 2010 has released a presentment based on the recommendations of Ministry of Youth Affairs and Sports. As per the presentment, usage responsibility freedom has been extended to import of athleticss goods & A ; requisites for developing intent besides. Initially this freedom was merely valid for import of athleticss goods for keeping competition.

Some of the extra installations in the presentment are

Initially merely Sports Authority of India was allowed to Import. Now the same authorization has been extended to Sports Authority of States.

National Sports Federation is allowed to import on behalf of associations affiliated to State/District.

Besides as per the Custom Notification 13/2010 ; all Sports goods, equipments and necessities imported for forming the Common Wealth Games are to be exempted from Custom Duty.

Global Scenario in the Sports Goods Industry

The Sports goods fabricating industry is dining owing to the big scale viewership of athleticss and the overall athleticss industry making the dizzying highs of $ 500 million this twelvemonth. Thus there are even more people who are acute to fall in this bandwagon and expression at athletics as non merely a avocation but as a serious retail fabrication concern.

With the major featuring events marketed in a magnificence manner coupled with the dire need for corporate encephalons to emulate the wellness is wealth construct, more persons are buying athleticss goods at that place by advancing the planetary athleticss goods industry to elevated highs.

Online gross revenues of athleticss goods is dining at 32 % addition over the 12 months terminal of June 09. Therefore selling on the cyberspace has many chances for athletics trade names, when many new retail merchants are come ining the market on a regular footing.

An independent association called The World Federation of the Sporting Goods Industry ( WFSGI ) is formed by planetary makers, retail merchants, providers, state specific federations and other featuring trade names and goods related concerns. It is the universe organic structure for featuring goods industry and the IOC besides recognizes it within its Olympic household. The WFSGI does non work for its ain addition and is a non-profit organisation assisting the pudding stone of featuring organic structures to work together.

The WFSGI helps the publicity of just trade wherein more people are actively involved in athleticss both as a concern and a calling. The federation updates its members on of import Torahs and ordinances for merchandise safety and improved on the job conditions. They represent the featuring goods industry and are like a affair between the international organisations like the UN, WTO, etc and international athletics organisations like the IOC, International Federations, etc.

Sports goods makers

There are many celebrated makers like Adidas, Nike, Puma, Slazenger, Yonex etc that are internationally acclaimed and are the planetary leaders in athleticss goods makers. We will take a expression at the top 3 makers,

Adidas ( Herzogenaurach, Germany ) is an international giant for fabricating footwear, accoutrements and dresss. Adidas manufactured footwear includes football, hoops, running, golf, preparation, outdoor and cycling places for work forces and adult females. Among accoutrements, it manufactures footballs and shin guards, tennis wristbands and caps, exercise and weekender bags. The dresss include New Jerseies, socks, trunkss and developing outfits. Its subordinates include Reebok, Rockport and the Golf trade name TaylorMade.

Nike ( Beaverton in Oregon ) undertakes the distributing, selling and designing of accoutrements, dresss and footwear on a planetary footing. Nike is a universe leader in athleticss goods maker with its subordinates like Umbro, Hurley International, Converse and Cole Hann interior decorator.

Puma ( Herzogenaurach, Germany ) Puma is into cricket equipment fabrication since an early phase and the large male childs of Adidas and Nike have late joined the set waggon. Puma besides designs, distributes and makes athleticss equipment, dresss and accoutrements.

International Policies

Every state does its spot to guarantee that the imports are low and the local makers have a just portion of the markets in its domestic markets. We have given the policies of a few states to assist in this enterprise.

Brazil: The anti dumping jurisprudence is a major barrier to researching the at hand concerns forecasted due to the 2014 World Cup and the 2016 Olympics. Harmonizing to this every merchandise manufactured in China will hold to pay an anti dumping charge to the Brazilian Government and this increases the monetary value of merchandise to be sold in Brazil. Thus local Brazilian manufactured merchandises stand to derive from this and the international community is seeking difficult to revoke this anti-dumping policy.

Dutch east indies: To cut down the imports, every cargo of imports that enter Indonesia is capable to a rigorous review and the cost of this is a load to the importer. Thus the importing clip additions and this encourages local makers.

United statess: The Obama Government has implemented a “ Section 421 ” that imposes certain duties on tyres imported from China and this is expected to keep garrison against the fabric and dresss besides from China. Since US imports 97 % of its dresss, this import duties on China has been done to seek switching the fabrication industry from China to Central America.

China: Many states take a precaution against goods manufactured and imported from China by implementing assorted anti-dumping Torahs and therefore protect their trade involvements with China.

South Africa: Addition in the import duty which was already high at 40 % to 45 % farther increases the monetary value of imported goods in the state but this has non seen any blunt alteration in the addition in the net incomes of the local makers. With the featuring events like the Football World Cup and the Cricket Champions League T20 these import duties have non been a hindrance and the local gross revenues loot downwards further.

Environmental factors to be considered

Recycled stuffs in development of athleticss goods: This can be achieved by utilizing recycled stuffs in portion with other stuffs.

Environmental preservation in development of athleticss goods: Merchandises that should non harm the environment have a long shelf life and are easy disposable.

Energy preservation in development of athleticss goods: Provides the organic structure with the right sum of heat and cold to keep the organic structure temperature.

Ecological friendly methods in development of athleticss goods: Merchandises that do non degrade the environment during its fabrication procedure and toxic substances should be emitted off from human inhabitancy.

Reuse methodological analysis in development of athleticss goods: Merchandises that are retooled and can be reused or may be can be converted into a different merchandise.

Challenges faced by the Sports Goods Industry

Some of the challenges faced by the Sports Goods Industry are as under:

Most of the industry is in bantam sector and the Production volumes are low

Low mechanisation in the MSME ( Micro, Small and Medium Enterprises ) industry. The push is chiefly on manual labor.

There is a famine of research and development installations

Lack of synergism and coordination amongst assorted makers critical for Component Approach

Higher production cost due to low graduated table of production

Relatively higher involvement rates for loans

Insensitivity to client needs/ hapless channels of client feedback and client ailment redressal system.

Minimal outgo on trade name edifice, advertisement

Lack of professional direction

Lack of chances for athleticss goods makers

Lack of Tax freedom, authorities support, inefficient transit and distribution system has resulted in loss of client and gap of many new exporting states like China and South Korea.

Many of the importation states are preferring Bio-Degradable goods and failure of Indian industries to come into this term has resulted in farther loss of planetary market portion.

Sports equipment does non include Gyms & A ; wellness equipment, which are now really popular.

The power supply to most of the industrial units in major bunchs of athleticss goods ( Jalandhar, Meerut and Srinagar ) is really fickle

Summary and Recommendations

The athleticss goods industry is a sector with huge possible to turn in the close hereafter. The resiliency of this industry was displayed for the universe to see when it remained mostly unaffected by the planetary economic recession in 2008. But an of import obstruction to the growing of the Indian athleticss goods industry into an internationally competitory sector is its comparatively little graduated table of operations ( it is chiefly confined to Jalandhar, Meerut, Srinagar and Delhi ) , as a consequence of which it is non able to provide to bulk demand.

Some recommendations to turn India into a first athleticss goods fabricating hub are:

Puting up of athleticss fabricating composite

Sports fabricating bunchs should be set up in Punjab, U.P and Jammu & A ; Kashmir, where bulk of athleticss goods are manufactured, with installations like an information Centre where all the latest information on natural stuffs, engineering, specifications etc. is available ; skill development Centre for developing work force for assorted merchandises being manufactured, etc.

Infrastructure:

Infrastructure at ports should be upgraded to run into international criterions with speedy off-loading and on-loading installations. Besides, the power supply at most of the industrial bunchs is really fickle, with some units acquiring power merely 3-4 yearss a hebdomad. To work out this job, industrial units should be given power supply for at least 12 hours a twenty-four hours.

New merchandise development

Harmonizing to surveies conducted by taking bureaus, merely 20-25 merchandise groups are manufactured in India whereas over 100 merchandise groups have been identified as athleticss equipment internationally. There is an pressing demand for merchandise variegation which can be met by set uping an R & A ; D Centre to carry on research on new merchandises.

Natural stuffs

The athleticss goods industry faces many hurdlings in obtaining several indispensable natural stuffs for industry of athleticss goods. For illustration, willow, which is used to fabricate cricket chiropterans, is a type of wood which is available merely in Jammu & A ; Kashmir. However, the authorities has banned the motion of willow outside the province. Similar is the instance with cane, which is available merely in the Andaman & A ; Nicobar Islands and the north-east. Such prohibitions on the motions of indispensable natural stuffs should be removed.

Fiscal steps

Particular inducements, for illustration, a revenue enhancement vacation of 5 old ages, could be given to industries in this sector which adopt automated and modern methods for fabrication.

Selling and merchandise publicity

Domestic

It is of import to popularise Brand India domestically. International events which are held in India could be obligatorily required to utilize athleticss goods manufactured in India, which pass international specifications and criterions. In fact, the Commonwealth Games, to be held in India in October, would be an ideal chance to heighten the image of Indian athleticss equipment and popularise Brand India. Another method could be to promote the national athleticss channel, DD Sports, to air advertizements of national athleticss trade names at concessional rates. Presently, most local trade names can non afford to advance their trade names on Television.

International

Engagement of little and average Indian makers at international athleticss carnivals and exhibitions should be encouraged, with the Government subsidising the cost of engagement. Brand India should be promoted at these international carnivals with promotion support from the Government. Besides, the cost of obtaining international enfranchisement, which is necessary for Indian goods to be used in international tourneies, should besides be borne by the Government.

Thin fabrication techniques

A separate survey on the athleticss goods sector should be commissioned by the authorities for analyzing the present production procedures and suggest alterations to better productiveness and minimise wastages and do the sector more cost-efficient.

The entire universe trade in athleticss equipment, athleticss dresss, athleticss places, etc. is estimated to be around $ 80 billion. Of this, 70 % is accounted for athleticss dresss and athleticss places, 5 % for athleticss accoutrements and staying 25 % for athleticss equipments. This categorization does non include gym equipment, which is now going really popular. In India, athleticss equipments entirely are considered as athleticss goods and athleticss places and athleticss dresss are non considered as athleticss goods at all. All 4 classs of athleticss goods should be brought together on a common platform to project India ‘s capablenesss in holistic mode.

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