As the soccer season is drawing to a close, it?s heartening to note that major tournaments across the globe have an India connection, thanks to India?s long tradition as a supplier of sports goods and accessories. The sports goods industry, more than 100 years old, is among the largest producers of footballs and other inflatable balls. In fact, bladder inside the Adidas Jabulani ball in the ongoing World Cup is produced by an Indian company.
Though the sports goods industry produces more than 300 items, major items of exports, besides inflatable ball, are hockey sticks and balls, cricket bats and balls, boxing equipment, fishing equipment, indoor games like carrom and chess boards and protective equipment. India?s sports goods are exported to more than 130 countries, key destinations being the UK, the US, Australia, South Africa, Germany and France.
The industry finds its roots in Sialkot, Pakistan. During partition, many Hindu artisans shifted to the Indian side of Punjab and Uttar Pradesh. Jalandhar is now the centre of the sports goods industry. Meerut in UP is the second largest cluster and Gurgaon in Haryana is the third largest. Following liberalisation and integration of world markets under WTO agreements in 1995, the sports goods sector has come under tremendous competition from foreign brands. Mechanised production from China, contrary to India?s manual process, is particularly a challenge. The industry, however, is steadily embracing new technology and adapting to the changing global trends, aiming to be the world?s most important centre for sports goods manufacturing.
India has about 1,250 registered and 2,000 unregistered large, medium and small sports goods manufacturing units, providing direct and indirect employment to about 1.7 lakh, mostly women and weaker sections, according to a joint study of the National Productivity Council (NPC) and the department of industrial policy and promotion (DIPP).
Exports of sports goods during 2008-09 were worth Rs 586 crore, a year-on-year growth of 13%, going by the Sports Goods Export Promotion Council data. The share of top five items?inflatable balls, hammocks, cricket bats, boxing and table tennis equipment, and general exercise equipment?to overall exports continues to be around 60%. General exercise equipment was a new addition in the top five category in 2008-09.
According to the NPC-DIPP study, while a few well-organised units employ more than 500 workers per unit, small unorganised units operate with eight to ten workers. Broadly, nearly 60% of the workforce is skilled. Also, import content has been increasing over the years; it rose from 10.21% to 18.64% between 2004-05 and 2008-09.
According to industry sources, ?Indian sports goods sector maintains global standards and can compete in all ranges of products. However, due to the lack of government support in terms of tax exemptions, efficient transportation, infrastructure facilities and raw material availability, exports to the US, the UK, Canada, Australia etc, are declining. Due to environmental considerations, many countries have started using biodegradable products like polyethylene, but the Indian sports industry is not using any such products and is not easily available in the markets also.?
However, despite the global recession, sports goods industry recorded double-digit growth (in rupee terms) in 2008-09, though there is decline of around 1% in dollar terms.
But the industry faces several challenges. The introduction of high-tech and more environment-friendly material in manufacturing abroad and the lack of government support for international promotion of the industry are limiting its growth in the international market. In the domestic market, the rising popularity of international brands among Indian consumers, easier import procedures and duties, and the entry of international single brand stores pose distinct challenges to the industry.
The world trade in sports equipment, accessories, apparels and shoes is more than $80 billion. Out of this, 70% is accounted for by sports apparels and shoes, 5% by accessories and the remaining 25% by equipment. For the Indian sports goods sector to corner a decent share of that market, it is essential that the government set up composite sports clusters having technical and logistics support of international standards so that the industry can make finished products that meet international standards in terms of technical specification and pricing. Information dissemination centres and R&D centres also need to come up, besides better infrastructure, training and testing facilities.