Virus spreads good news for importers

Ludhiana: Spread of coronavirus in China has set cash registers ringing of some importers, who are seeing a sudden spurt in their sales and orders of Chinese goods. Some of the most sought-after goods from China that are seeing a huge demand these days include fabrics like interlock, ponte, jacquard knit and footwears.
Businessmen say the situation is the outcome of fear psychosis among the end customers and manufacturers that imports from China may stop any time. Besides, there have been long delays, with production in China hit due to shutdowns caused by virus spread. The development is turning out to be a blessing in disguise for the importers, who had a dead stock of goods, which is now in demand. As per industry sources, rates of Chinese fabric and footwear are seeing a surge of 2% to 5% and are likely to climb further.
Speaking to the TOI, a leading importer of footwear in the region says, “After the spread of coronavirus in China, demand for footwear has doubled. Customers, who earlier used to take 15-20 days’ credit, are now making spot payments and also giving partial advance for new orders. This is happening because of the uncertainty about future of imports from China. Therefore, wholesalers want to stock adequate quantities to combat the situation that may arise if imports from China come to a complete halt. At present too, the movement of goods is very slow from China. We have hiked our rates marginally.”
The importer adds, “A problem that will become more serious in coming days is that we will not be able to visit China to physically check the samples of goods. In case of footwear, without checking the samples, it is not possible to place an order just by seeing pictures on WhatsApp or email.”
According to a fabric importer from Ludhiana, “This is a happy time for us as not only there is high sale of Chinese fabric, but the dead stock, too, has started selling. Due to the huge demand for fabric, the rates in market have increased by 5%. Another good thing is that people who were behindhand with payments are not only clearing the backlog, but also offering to purchase next order on cash. However, the problem will arise in case the fabric imports stop completely. Then, our business will be ruined.”
Local businessmen who are using Chinese fabrics are, however, unhappy.
Narinder Mittal, a garment manufacturer, says, “The coronavirus situation has given rise to confusion and there is panic in the market. As we do not know about the future of trade with China, we are ordering quantities more than required to keep the material in stock. This is increasing our investment without any concrete orders. If imports stop, we will be at the receiving end as similar fabric is not available in India even at higher rates.”
Bhushan Abbi, president of Knit and Fab Cluster, Ludhiana, says, “This is a serious situation and Indian government should give it a thought. Our dependence on Chinese goods has backfired. What if tomorrow relations between India and China get so strained that imports stop. Then India’s industry will be completely destroyed, as there will be no alternative of goods at same rates here.”
Local units to gain
The local manufacturers, particularly those of fabrics, are set to gain if imports from China come to a temporary halt. Due to the influx of Chinese fabrics, their businesses had taken a hit as demand for the local fabrics fell due to their high price and low quality as compared to the Chinese ones. Manufacturers of footwears, sanitary products, LED lights, among others, too, will benefit from it.