FDT: What are your views on the customs duty hike on imported furniture and parts? How do you think it will impact the furniture industry of India?
Kirit Joshi - The hike in import duty of furniture is going to positively impact the Indian furniture manufacturer. 25% + 10% cess + 18% GST comes to almost 50% besides freight clearing and forwarding which is almost 10% . So total cash flow will be 60% of ex works price.
With such high duty ‘Made in India’ will get major boost. The impact of increase in Import duty will be on both offline and online equally. But largely to offline industry. I guess the entry and middle-end furniture will get mostly affected.
FDT: How will the hike impact the buying pattern of Indian consumer?
Kirit Joshi - It will generally not affect the buying pattern of consumers as they will have lot of ‘Made in India’ products at competitive prices.
FDT: How do you foresee the future of Indian furniture industry in 2020-21 for Spacewood? Also, list any top three trends for the next year.
Kirit Joshi - Spacewood is very optimistic about FY 20-21 as there is a shift towards branded furniture. Design trend in home furniture is more towards mix of material, glossy panels, soft cushions etc. For modular kitchens more neoclassical designs will be popular.
FDT: What is the impact of Coronavirus outbreak in China on the furniture import?
Kirit Joshi - The impact of the closure of Chinese market will come in two ways, i.e., there are a lot of companies who are importing finished furniture products from China. For them, there is a lot of uncertainty in the market in terms of when and whether they would be able to receive their orders or not. In addition, they are also concerned that when the factories will open, whether they would prioritize India or the USA or other European countries. It is not necessary that we will get a priority. This will lead to a shortage of materials and eventually a lot of Indian sourcing will happen. Secondly, there will be an effect over the manufacturers as well, as they are sourcing large quantity of hardware and raw materials from China. In the end, there could be an impact on the prices of the furniture as they may go up marginally in the future.