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India Furniture Industry

By: EconomyWatch Date: 30 June 2010

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The furniture industry in India is considered as a "non organized" sector, with handicraft production accounts for about 85% of the furniture production in India.

The furniture sector in India only makes a marginal contribution to the formation of GDP, representing just a small percentage (about 0.5%).

Among all the types of furniture used, office furniture segment is the one that boasts the most important companies, both from the point of view of size and of the technological innovation of the production. The furniture industry employs a total of around 300,000 workers.

The total production of furniture in 2001-02 ( according to Annual survey of Industry) was USD 3580 million.

Foreign trade picture with regard to furniture is not very impressive. In 2000, India ranked 48th among furniture exporters and 49th among importers. This situation can be explained by he high import duty applied, and on the other hand, from the low technological level of Indian companies and the local tastes and traditions that influence the style of the products offered, making them difficult to export.

According to data for index of industrial production, as many as 14 of the 17 two-digit industry groups have shown positive growth during the month of January 2005 as compared to the corresponding month of the previous year. However, Wood Products; Furniture and Fixtures' have shown a negative growth of 16.7%.

The more recent data shown in the table below , obtained from ministry of commerce, shows the trend in this category over the past 6 months.

Aug'2004	72
Sep'2004	75.5
Oct'2004	71.8
Nov'2004	71.5
Dec'2004	71.7
Jan'2005	69

Wood and Wood Products, Furniture and Fixtures" carry a weight of 27.01 % in the total MANUFACTURING SECTOR. This category has however shown a decline in recent some years.

The visible consumption of furniture is estimated to be 15 USD per year per inhabitant but this average hides wide variation in populations and in cities.

Usually, a manufacturer or a craftsman has his own store(s) where he presents products or imported furniture. Consumers choose in the store or order bespoke furniture.

India presents a favourable outlook to sell furniture and one expects the furniture industry to grow further in the coming years. Two important reasons for this are:
First India's large size and;
Secondly, Indian tastes have started to be more refined and Indian people are looking for more western furniture style. The prospect of the furniture sector in India seems positive.

Several agreements have been signed between local producers looking for technology and European companies trying to reach a market or to reduce their costs.

A recent on-field UEA research , co-funded by the European Commission, has allowed to identified some 150 Indian companies (furniture manufacturers and retailers but also banks, hotels, enterprises) wishing to start commercial and/or industrial co-operation with EU counterparts. Their company profiles are quite complete.

Legislation on various ways of setting up business and on intellectual property rights exists as well as a lot of advantages for foreign companies to establish business alone or with partners in India . Indian government is continuously taking steps to minimize entry-exit barriers for foreign companies and government is facing pressure to liberalise the duty structure. Further, in comparison with other countries such as China and Mexico, where the time required to start a business is less, India still involves more legal fulfillments. Hopefully, in coming years these shortcomings will be done away with.

Index of Industrial Production