There are many businessmen who have given up their ventures because of imports from China. People and traders need only Chinese products. Not just small businesses, even business giants in India will surrender and fold before Chinese competition. A good example of this is tile business.
The current trend is to pave tiles if there is some space. Cleaning the front yard is a thing of the past. Now people can’t sleep without paving their front yards with inter-locking bricks. They can’t stand the sight of an ordinary wall; they have to fix tiles on it immediately. This passion is called wall cladding, and tiles are available in different designs.
No house without vitrified tiles is the slogan of builders. It is the Chinese, perennial experts in playing with clay, who benefit from this craze.
It doesn’t mean that tile traders have to swarm to China like bees. There are dealers who go there and import tiles in large numbers and supply to shops. Gujarat used to be the centre of tile-making companies in India. But Chinese imports have put even them in a fix.
Manufacturing low-cost tiles has almost ground to a halt in Gujarat. Even big companies import tiles from China and sell them here with their brand name. Remember the English saying, “If you can’t beat them, join them.”
Even in shipping rates, China will come in front. If the tiles made in Gujarat are loaded onto trucks and transported via road, it will not be possible to bear the cost. Hence they are transported in containers on ships.
It costs about Rs 80,000 to transport a container from Gujarat to Kochi. This is the rate of companies, including shipping Corporation. At the same time, what is the cost of transporting a container from China to Kochi? Just 45,000 rupees!
It is said that the cost of diesel for the ship and the salaries of employees are high here. Bunkering charge is also more. The cartel of shipping companies will not reduce rates. At the same time, cost comes down when a large number of containers are loaded onto mother ships at Guangzhou in China and brought to Colombo, where they are transferred to smaller vessels, and unloaded in Kochi.
Mother ships can carry up to 1,500 containers, and as per that transportation cost comes down.
Chinese companies have the capacity to make 25,000 square metres of tiles a day. They are ready to supply any order. Indian companies do not have such volume. Not only on tiles, but on any item China reaps the gain of volume business. As per that, price can also be lowered. That is where we are left behind.
Still, it is justified to have doubts about customs duty on tiles. Yes, it is there. But the low price in Guangzhou will beat even that. The total tariff is 24 per cent, including 10 per cent customs duty, 12.5 per cent customs valuation duty, and 3 per cent cess.
When a product is brought from Gujarat, 14.5 per cent tariff, including 12.5 per cent excise duty and 2 per cent CST, has to be paid. The tariff on Chinese products is about 10 percentage points more. Still they are imported because it is profitable.
Just one Kerala company, Spaniso Studio, imported 890 containers of tiles from Toscana Company in Guangzhou last year. Not just Indian tiles, even German and Italian tiles have surrendered to the Chinese, who copy their design and sell products at a lower price.
Do you want bags of big brands? You will get them for only a few hundred yuan in Guangzhou. They will beat even original products.