While looking at the news today in feed, most of the news was related to the Russia-Ukraine war, state elections in India, some on Covid but there was a news piece which grabbed my attention, the news was of Lakshya Sen getting a silver in All england championship.
Since the Olympics & Paralympics held in Tokyo in August 2020 where hard working Indian athletes gave their best ever performances. In Olympics, India won 7 medals & 19 medals in Paralympics, each of these medals had their own unique achievements. Indian sports has been rejuvenated by the performances after 1.5 unassuming &quiet years(2020 + 6 months till July 2021) given the potential of our athletes it is but obvious that the sports equipment manufacturing companies are getting new consumers to look at. The medals & performances by our Indian contingent has been forecasted to have a very positive impact on the overall sports economy of India.
Being a society, having sports as a cultural centerpiece right from epics to modern times, we as a nation should strive to become one of the biggest sports equipments manufacturing hub which can guide the world in terms of buisness models,sports governance and many other allied fields.
Present status : At present, sports as a sector contributes only 0.1 percent to GDP. The entire global sports industry is estimated to be close to $480-620 billion, in many countries the sports industry contributes between 1-5% of the GDP of an economy. According to the report of "Impact of Covid 19 on Revenues of world cricket & indian sports", it has been found out of the entire sports economy of India about 85% of the contribution is of cricket alone.Sports have a major contribution towards nation building & imagining the sports. 1 of the most important component of entire sport ecosystem in India is manufacturing of sport equipments.
Sports equipment manufacturing : In India sports manufacturing units are mainly centered in WB,TN,UP(Meerut),Punjab.Sports equipments are mostly imported in India from different nations, in the year 2021, the value of imports in FY 2021 stood at US$9.5 million, the biggest exporters or the beneficiaries of exporting sports goods in India are China,Switerzland,Italy, France &43 other countries. The amount of imports over the last few years have decreased substantially from 30.74 USD million in 2009 to 9.53 million in 2019.
This is a big improvement & many experts credit government policy of 100% FDI has helped India reduce its imports by a huge margin. 1 of the most visible beneficiary of this policy launched in 2000's has been the company Decathlon.
India's exports of sports equipments in the recent years have also increased, from 236.45 million$ in 2014 to 303.38 US$ in 2017. Top export destinations of Indian sports goods are : UK, France, Australia, USA, NZ, Germany, Ireland & South africa, with the highest exports being to uk & usa.Cricket, Badminton arguably the 2 most famous & loved games in India contribute to a total of 49% of the export quantity. Some of the reasons for the boosting of sports equipment exports is : formation of SGMEA which has helped a lot of manufacturers to find proper export markets & access to some of the best government schemes.
Strengths of Indian manufacturing firms :
(1) Diversified market for sports goods
(2) Success of league system in sports like cricket, badminton is leading to a lot of popularity in turn pushing up demand for sports goods, when demand rises then using simple Keynesian economics the private consumption would rise the production capabilities in turn generating employment opportunities.
The IS-LM curve will also shift towards the right.
(3) Given the youth demographic of India & a rising aspirational middle class, focus on health issues sports manufacturing equipment demand is going to rise like never before, therefore it becomes very important to boost the sports equipment manufacturing base & reduce the imports for sports goods in Olympic sports like Javelin throw,discus throw, swimming etc.
(4) Labour intensive industry, i.e. more employment opportunities which makes it have a positive outlook among general public.
(5) Culturally India has been always connected to sport.
(6) People's interest peaking in different sports in today's time.
Government intervention:
The focus of government of India since 2010's to improve sports infrastructure in India(like KIYG,KIUG, FDI for sports which have harnessed potential for the sports in positive direction)will also give big dividends to all sports manufacturing industries in the near future. The Government of India has also started the Major Dhyan Chand Sports University which will open up a lot of opportunities for those youth interested to make a career in sports which can be of sports psychologist or manager or sports admin or even a sportsperson.All such steps have boosted the sports equipment manufacturing sector in a huge way. Funding to educational institutions in 20 different areas has also boosted the sector. Public gyms have also allowed manufacturers to target the fitness equipments which is a new field for them.
Digitalization of sports equipment sales has allowed the sports companies to target a wider range of consumers across globes.Use of technology & National talent search portal is also projected to boost the entire sports manufacturing sector in future.
Challenges :
(1) Regional imbalances, for example : North eastern India which has given India so many sportstars has very few manufacturing units.
(2) Rising competition from foreign brands & companies who sell some sport goods at a cheaper price, this can be considered as a reason for India still importing sports goods in many Olympic sports.
(3) Lack of a strong Indian brands in select few sports. In some sports like badminton,tennis most of the racquets preffered by athletes are of foreign brands given the wide range of options that they possess & the cutting edge technology that they employ, though many raw materials exported are from India only. In some sports, there is a need to bring in strong Indian brands to make them global branda.
(4)Ever evolving nature of sport equipments which of course leads to a lot of production cost, rise in TVC & AVC leading to diminished profits, which sometimes leads to investors showing less confidence in turn effecting the aggregate demand.
(5) Since sports is still considered a luxury item, it has high elasticity of demand (Own price elasticity would be somewhere greater than 1, cross price elasticity would also be both positive & negative, it depends upon the nature of good i.e. whether a substitute or a complement) which makes consumers price sensitive towards it.
(6) E-commerce facilities are limited for sports commodity goods however a few companies are striving to cut down the gap.
(7) Technology exchange is still a problem in many industries.
Constructive suggestions from my side:
(a) Government of India can set up Sports Technology Exchange Parks(STEP) where sports companies(including MSME) will exchange their technologies/ideas/suggestions for manufacturing & marketing with each other.
(b) PLI scheme for sports equipment manufacturing can be included in the budget for 2023.
(c) Setting up 10 mega sports equipment manufacturing parks can be set up on the lines of PM-MITRA scheme . These parks can be set up preferably in tier 2 & 3 cities in states of UP,Punjab, Haryana,Gujarat,TN,Manipur(2:2:1:1:2:2).These states have been selected by me given the population density & already a base for manufacturing is available.
(d) A suggestion for the sports associations of India, is that they can start leagues but with an IPL revenue model. Sports associations can form high powered committes in consultation with the Government of India to look into how revenue streams can be diversified.. The sports associations can also use the social media platforms like YouTube to make a strong reach.
(e) Sports manufacturers should also take benefit of all MSME schemes like ECGLS.
(f) Domestic competition like Toycathon can be extended for the sports equipment manufacturers in India .
(g) Sports associations in India can collaborate with countries like Australia, Indonesia, Malayisa, Dennmark to improve sports equipment manufacturing in India.
(h) Targeted MoU's with some sports equipment manufacturing nations can be called on to invest in India.
(i) Reducing customs on exports of Indian sport equipment which are finished goods to the countries of Africa, Latin America as these countries have a huge demand from which Indian manufacturers can benefit.
(j) Special focus by startups can also be given for sports equipment used by our paralympians who have made India proud time & again on different international podiums.
Benefits of the suggestion :
(1) Technology exchange parks will lead to an exchange of ideas & technologies which is always good in long run.
(2) Development of Indian brand
(3) Rise in Domestic competition would make Indian companies as they would be more future ready for the challenges that they may face from different companies, in today's day & time, its important for companies to compete with one another. g9oj
(4)Increased revenues for sports associations which will push forward sports diplomacy & collaboration with many countries.
(5) Improved margins would be obtained by Indian manufacturers when they export to African & Latin American countries.
(6) Rise in India's image as a soft & economic power.
(7) Contribution to GDP will rise
(8) More people opening startups in sports related sector which will boost the morale of sportspersons.
(9) Production of sports equipment goods will also boost which will give further filip to Atmanirbhar Bharat & Make in India schemes.
(10) Sports culture improvement in India as access to sports goods is easier.
(11) Nation building process from ground zero level will improve & further more people will have good health.
To conclude, we can see that sports equipment manufacturing ecosystem has a huge potential in India and if its optimized fully by different governments,companies it would fulfill PM Modi's dream of Atmanirbhar Bharat & will also fulfill many sportpersons dream of developing India into a sport hub.
Everyone should review, renew, rejuevenate their ideas from time to time to help India rise like a phoenix in all fields, as citizens it is also our duty to help India script a wonderful development story which will make each & every Indian proud of their motherland.
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| India's medal winners: Mirabai Chanu, PV Sindhu, Neeraj Chopra & Ravi Dahiya(left to right). |
