Umbrella makers cheer on hopes of normal rain, dip in cheap Chinese imports

A fifth of umbrellas sold in India the past three years came from China. But rising labour and material cost and local authorities' anti-pollution drive have made Chinese brollies expensive

Umbrella and rainwear makers are expecting good business this monsoon season, with rainfall projected to be at normal levels. Umbrella makers, in fact, are also relieved with the decline in the import of cheap readymade brollies from China, which has been destabilising the domestic market for the past several years. However, orders from retailers aren't in full flow due to a financial squeeze and the delay in the onset of monsoon.

According to industry players, India’s umbrella demand is pegged at 120-150 million pieces a year, although varied estimates are being put forward for market size. Almost a fifth of umbrellas sold in India were imported from China the past three years, at very cheap rates. However rising labour and material cost in China, local authorities’ anti-pollution drive, have made that country's products expensive. The Indian rupee is also depreciating the past two years, due to which imports from China have reduced to 7-8 million umbrellas.

"However, for umbrella making, 36 components are required and a large part of these are still imported from China, despite of fall in ready umbrellas,” says Rajesh Chopra, Ex-President of Umbrella Manufacturers & Traders Association and founder, Sagar Sons, an 80-year-old firm in this industry. But he adds that the cost of imported components has risen by 20 per cent due to higher wages and rising raw material prices in China. These costs are being passed on to the consumer.

The umbrella industry in India is scattered and dominated by small scale businesses. The trade is seasonal and hence small shops and hawkers also play a big role. “This being seasonal and a high employment-generating industry, the government should focus on increasing exports. India is capable of capturing the EU and US markets, which are currently dominated by China,” says Naresh Banthia, MD, Citizen Umbrella, the largest manufacturer in the low- and mid-end market.

The big brands in the business include Poppy Umbrella and Johns Umbrella from Kerala, KC Paul, Citizen from Kolkata and Mumbai headquartered Sagar Sons (Happy brand). Rajesh Chopra says 12 per cent GST should be reduced as this is largely a poor man’s product.  

Low-end umbrella and rainwear or raincoats are made from polyester while nylon is used to make high-end ones. Some high-quality nylon is also imported from China and Taiwan. A weakening rupee is making this imported material costlier in India, raising the price of the end-product. Umbrellas with silver coatings on the inner side are also marketed as summer products due to their ability to protect from the heat.

In the monsoon, the rainwear market is growing along with the two-wheeler market in the country. Rainwear makers complain about rising cost and say that product prices have gone up 15-20 per cent across board this season.

Shantilal Chheda of Eastern Rainwear, makers of Top in Town brand says, “Apart from rising costs, another worrying issue is the differential rate of GST. For cheaper and low- and mid-end markets, rainwear made from polyester attracts 18 per cent GST, while high-end goods made from nylon and used largely by the upper class attract only 5 per cent, since nylon is expensive. This anomaly needs to be addressed.”

• Size of umbrella market pegged at 120-150 milliom piece a year 
• One out of 9-10 Indians buys an umbrella every year
• Umbrellas make up a third of the rainwear market in the country 
• China is largest manufacturer catering to global market, followed by India
• India started exporting umbrellas on a small scale, and has huge potential
• Prices are 15-20 per cent higher across range due to rise in production cost