While glancing at fallen hair in an Indian salon, one may not realise that they are contributing to the country's $ 770 million (US) hair export industry.
In February 2022, Enforcement Directorate (ED) uncovered a massive racket smuggling Indian hair illegally to China through Myanmar. This network was spread across from Hyderabad to Aizawl to Champhai in Mizoram, the border town with Myanmar. 'Smuggling of raw human hair from India, mostly in the form of under-invoiced shipments, is estimated at an annual ₹ 9,000 crore by the industry', wrote BusinessLine in its 'Trading in tresses: Locks of contention'.
'Around 8.6 lakh jobs have been lost since 2012, due to this smuggling and under- invoicing in many centres for processing Chutti/Goli (raw material) across India, particularly in Koppal in Karnataka, Madepalli in Andhra Pradesh, Beldanga and Bhagwanpur and surrounding villages in West Bengal'', mentioned a press note by the President of Human Hair & Hair Products Manufacturers & Exporters Association of India (HHHPMEAI). It further added that all the small units in these areas have almost stopped processing because of the smuggling of raw material to Myanmar, Bangladesh and then to China.
According to the data sheet provided by HHHPMEAI, in the last three years smuggling has caused loss of around 1,80,00 jobs in West Bengal, whereas Andhra Pradesh's Eluru district alone lost more than 20,000 jobs. The number of indirect job losses at factories was over 1,50,000. Overall direct job loss is around 4,11,000.
China's buyers account for 80% of the Indian hair exports and thus they possess immense potential to disrupt the Indian hair manufacturing and exporting industry, believes Sunil Emami, member of Human Hair and Hair Products Manufacturers and Exporters Association of India and CEO of Indus Hair Extension.
He said that the massive gap in numbers of hair exported from the country and domestic production of value-added products is due to China's reluctance to transfer technology. Another important issue is cartelization by them along with Korea.
'Koreans own 90% of the beauty supply stores in the US and Europe. China is their committed supplier. They do not allow other players to enter the chain', added Emami.
In September 2022, Economic Times reported that payment of nearly Rs 3000 cr was pending from China. Additionally, there's also pressure from these buyers for a 40% discount on hair exports, which are sold at an average price of $150 to $200 per kg. These demands for discounts are difficult to meet, especially in a post-pandemic era. Emami calls such demands 'infeasible' for Indian players.
The recent ban imposed by the Indian government on hair exports can bring back more than 3,00,000 jobs. Unlike earlier, where hair were exported without any restrictions, now it is mandatory to take permission or license from the Directorate General of Foreign Trade (DGFT) under the Commerce Ministry.
According to Emami, if China's aspirations to dominate the market are not curbed, India will lose out on a significant portion of global trade. India will surely shine if the right steps are taken for its growth in the sector!