“Traders are facing stiff competition from cheap Chinese electronic goods”

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Having a wide distribution and traders’ network, Delhi’s Lala Lajpat Rai market is a one-stop market for electronics hardware and other related products. With thousands of shops located in the market, traders face tough competition when it comes to selling goods at competitive prices. Added to this, they also face stiff competition from cheap electronic hardware imports.

All India Radio & Electronics Association (AIREA), of which the traders are members, has been actively working for the welfare of this community. In a conversation with Electronics Bazaar, Jagbir Singh Bira, president, AIREA (NZ), talks about the role of the association and the issues faced by traders of electronics hardware and products in Delhi.

jagbir singh

EB: How is the electronics B2B industry doing in the northern region?

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Delhi is home to one of the biggest electronics market in Asia, which is the Lala Lajpat Rai market. Here, the buyers get a lot of choice for all sorts of electronics hardware and products. The business in the region is going fine but the main issue is the increasing competition from cheap Chinese electronics hardware and products, which are of low quality. Since India is a price sensitive country, buyers prefer low cost products over good quality. These buyers are still to be made aware of the fact that quality should be given preference.

EB: How are the AIREA north zone members doing?

AIREA’s members are basically dealers and distributors of electronics hardware and products based in the Lala Lajpat Rai market. Although they are able to earn profits, the competition from Chinese hardware and products has led to a decrease in the profit margins of the traders. If the growth of this unorganised market is not checked, then the profit margins of the traders will continue to be squeezed.

EB: What is the role of AIREA in the electronics industry?

For the last five to six years, AIREA has been working to bring all electronic goods, parts and components into a single category with a uniform rate of tax, thus avoiding confusion and anomalies in the classification of electronic goods. AIREA has already been successful in bringing all electronic parts and components into a single category. Efforts are now on to bring all electronic goods into a single category.

EB: What, according to you, can India do to compete with China?

At the moment, we lack the entire ecosystem needed to compete with China. The amount of manufacturing done in India is very low compared to China, and India will take a lot of time to pick up manufacturing. The other issues that need to be addressed are Indian labour laws, corruption and red tape. We should have a hire and fire policy and not the protective labour laws that we have at the moment.

EB: What according to you, can India do to cut down on electronics imports?

Imports can only be cut down once we start domestic production on a bigger scale but we don’t have an ecosystem for that in India. We are not able to compete with China on price, our manufacturing costs here are very high and it is we who made China supply low quality goods to the Indian market by bargaining on the price. China is supplying to the US and Europe as well but the quality of what they export to that region is superior because Western buyers don’t bargain on prices alone.

EB: What are the other problems being faced by the traders in Delhi?

The main issue faced by the traders is the imposition of value added tax (VAT) by the government. Most of the items in the electronics industry are highly taxed. Therefore, as and when the government announces any hike in the VAT, we take up the issue with the VAT commissioners on behalf of all the members.

Another major problem faced by the traders, particularly in Delhi, is the bad infrastructure of the local electronics markets which leads to traffic snarls and lack of parking space. The parking problem in many traders’ markets cause huge losses because the lack of space to park their cars, keeps many customers away from the market. We feel that the government should address this problem immediately.

A choked drainage system, shortage of water, ill-maintained roads and lack of public conveniences are some other issues faced by the traders.

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