India’s Garbage and Cycle Industries Are Facing The Heat, Thanks To China

China Trade Free Trade Tariffs

Two reports in the last couple of days underline the impact of movements and decisions in global trade. This NYT report focusses on the impact on the $25 billion garbage industry in India. The crash in the industry is the result of China’s surprise cut in garbage imports last year. China buys most of the world’s garbage, and US sells the most. In plain demand and supply logic, China’s action cut the demand for trash globally even as trash supply kept overflowing from the US. This has had a severe impact on India’s garbage industry, which is now dealing with low prices and weak demand. This would also have an impact on the environment, as much of the garbage contains plastic which if not disposed of, will be toxic.

From the report:

The type of trash evolved as more Indians could afford more stuff. Water bottles appeared, along with shopping bags, clothes, cardboard and motorcycle helmets. The latest tech, first piles of cassette tapes, then CDs and DVDs started showing up. And cellphones, smartphones and all their accessories.

As the mountain grew it became more exhausting to reach the peak, where the new stuff was dumped. The 10-minute trek grew to 20 minutes. During the hot, dry summers, when temperatures top 110 degrees, pickers lugged liters of water to stay hydrated. Methane fires sprouted up across the mountain, lighting up the night.

China’s shift in policy, and the drop in prices, had a sharp effect on the slum. Workers are now struggling to avoid plummeting deep below the poverty line.

Another IANS report published by Mint said Punjab’s bicycle industry is struggling as cheaper Chinese imports flood the Indian market. It’s estimated that 200 bicycle factories have closed, unable to battle cheaper Chinese.

An excerpt from the report says:

At the heart of bicycle manufacturers’ grouse is how China has gatecrashed the Indian market through the South Asian Free Trade Area (SAFTA) pact, which came into effect in 2006. The agreement paved the way for the eight member countries to reduce customs duties of all goods traded among them to zero by 2016. China isn’t a party to the pact but is still reaping its benefits.

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