abhishreshthaa
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Huge Unorganized Sector
The unorganized sector includes the small-scale manufacturers and manufacturers of spurious bearings. The unorganized sector contributes to almost 15% of total industry turnover.
The unorganized sector players have a strong regional presence and mainly cater to the needs of the replacement market.
Imports
30% of total demand for bearing industry is met by imports. While a part of the imports come through official channels, there is also a huge volume of illegal imports. Legal Imports generally represent the specialized bearings not manufactured in India.
There are a large variants of imported bearings, each holding a small market share in India. Though, the quality of bearings manufactured by large players in India is comparable to world standards, domestic manufacture is not viable due to the small size of the market segment.
It becomes uneconomical to manufacture such type of bearings as it includes huge capital expenditure.
Illegal imports generally represent the entry of spurious imports of bearings. In the past, the Indian bearings industry was highly protected on account of very high import duties ranging from 150% to 240% ad valorem. As a result, an illegal import via smuggling and under invoicing of imports was the order of the day, accounting for a high 45-50% of total imports.
While duty rates have come down over the last few years, a few countries like China, Russia, Eastern Europe dump their excess production at a very low rate. This leads to a huge price differential between domestic and imported bearings (almost 40-50%), encouraging imports. Exhibit3 shows the current duty structure on bearings.
The unorganized sector includes the small-scale manufacturers and manufacturers of spurious bearings. The unorganized sector contributes to almost 15% of total industry turnover.
The unorganized sector players have a strong regional presence and mainly cater to the needs of the replacement market.
Imports
30% of total demand for bearing industry is met by imports. While a part of the imports come through official channels, there is also a huge volume of illegal imports. Legal Imports generally represent the specialized bearings not manufactured in India.
There are a large variants of imported bearings, each holding a small market share in India. Though, the quality of bearings manufactured by large players in India is comparable to world standards, domestic manufacture is not viable due to the small size of the market segment.
It becomes uneconomical to manufacture such type of bearings as it includes huge capital expenditure.
Illegal imports generally represent the entry of spurious imports of bearings. In the past, the Indian bearings industry was highly protected on account of very high import duties ranging from 150% to 240% ad valorem. As a result, an illegal import via smuggling and under invoicing of imports was the order of the day, accounting for a high 45-50% of total imports.
While duty rates have come down over the last few years, a few countries like China, Russia, Eastern Europe dump their excess production at a very low rate. This leads to a huge price differential between domestic and imported bearings (almost 40-50%), encouraging imports. Exhibit3 shows the current duty structure on bearings.