Covid-19, riots take a heavy toll on trade in northeast Delhi

The China virus and riots have dealt a double-whammy on northeast Delhi as hordes of small traders, who manufacture everything from smartphone components to masks with inventories sourced from China, are seeing their businesses bleed. The dust from the riots may have settled, but fear stalks the streets as customers and labourers have vanished from these areas and the delay in getting Chinese stocks is adding to the worry of this once-throbbing trading zone. Vasudha Venugopal reports.
Riot-scarred northeast Delhi is facing a double whammy of sorts. With China grappling with the Covid-19 virus attack, owners of shops and showrooms in this part of Delhi which includes Bhajanpura, Yamunavihar, Mustafabad and Khajurikhas are staring at production and logistics delays. Their inventories, which mostly come from China, are getting depleted by the day and the local riots have led to a labour crunch and increasing safety costs.

For the whole of last week, Shanawaz’s small manufacturing unit, ‘Phobia Enterprise’, in Chaman Vihar in Shiv Vihar used to employ over a hundred people, most of whose houses were burnt down by the mob in the Delhi violence. But today, Shanawaz does not answer any phone calls, suspecting that it could be from his clients.

The young wholesaler who imports N-95 masks from China, and manufactures anti-pollution and protection masks, employs 120 labourers, of whom only 23 are there at his factory today. The rest have fled the city to escape the violence.

“I am not answering calls from clients because I don’t know when things will become normal. The demand for masks has peaked...people are ready to pay much more. They want things fast. However, labour and logistics support is in a shambles here. All my money is stuck in China as things are not moving there. We used to make 45,000 face masks a month. Now, we barely have the resources to make 12,000. The six-layered masks used to come from China but they are not coming now. And to even make the other ones (pollution masks), we need labour and transport which we don’t have now,” he told ET.

For Mohsin Khan (27), who runs Total Computer Solutions in Old Mustafabad along with his brother, the past two months have been stressful. First, there was a shortage of electronic components from China following the virus attack, and then the riots, which has hit his business badly.

An expert in creating “secondhand” goods from electronic scrap easily available in this market, Mohsin has, for several years, been dependent on cheap Chinese electronic goods that he would procure from vendors at Nehru Place, assemble it according to his customers’ demands, and sell them, mostly in Ghaziabad.

“There are ninety kinds of chips that come from China..motherboards, video cards, complete system builds, bridges, SSDs, mouse pads, mice, keyboards, CPU coolers, components found in smartphones, displays.. ab toh samaan hi nahi aa raha…,” he says.

Mohsin, a resident of Loni, went to his shop on Monday only to return immediately. “Darr baith gaya hai (there is fear everywhere)..people have seen videos of entire godowns being set on fire..The vendors are not coming with their existing goods citing fear..clients also want to avoid coming here. Not one customer has come,” says Mohsin.

OPTIMISM SHATTERED
Traders in these areas were very optimistic just a few weeks back and were congratulating themselves for having largely weathered the virus storm because they had stacked up their inventories of Chinese-made parts to cover the Lunar New Year holiday period when China’s factories remain shut. However, the riots dealt a shattering blow on their optimism and the situation has only worsened.

Be it the famous old market in Mustafabad or Brijpuri that specialises in the sale of scrap and secondhand goods and plastics, to the thana market in Bhajanpura which has a line of shops selling hosiery, electrical, hardware and manufacturing items, fear continues to stalk traders who are reluctant to even fully open the shutters of their shops or stock them with goods. There is also a growing worry on when the goods from China will start arriving.

Most of the shops open an hour later than usual and down their shutters two hours earlier than usual. Many of them have also hired private security professionals to guard their godowns, which adds to total costs. On Thursday, while several shops were open, there was an uneasy calm as government authorities went to razed shops to assess the damage.

A trip around the Bhajanpura market shows its dependence on China for components -- be it bathroom accessories, bath mirrors, PVC tapes, tiles, door knobs, paints, chinaware, sanitation, water dispensers, pedestal fans, LED bulbs and kitchen goods, and even materials used for Holi such as balloons, colours and water guns. PWC tapes that are available in over 50 colours are now in limited supply, so are LED bulbs from China which cost at least 40% less than the Indian made ones.

There are also stores that do finishing work for Kajaria, Supreme and Hindware here. Retailers said the prices were at least 3-5% lower than most areas in New Delhi, and given the location, the market has customers from Meerut, Ghaziabad, Noida and Delhi- NCR. But there has been a significant drop in footfall in the last few days.


There is no large-scale manufacturing or designated industrial areas here but a lot of small unorganised units, mostly dealing with making and selling plastic products such as bags, bottles, buckets and pipes.

“The market was known for its wholesale trade of saraiya (metals).. but today, most of the traders here depend on China for their goods,” Yash Dhingra, a businessman, said.

On Thursday, the traders of these areas held meetings with retailers from Loni road, Durgapuri, Rohtas Nagar, Babarpur and Mandoli to request help from them to get their business back on track here, he added. Peace marches were also taken out to revive the confidence of the customers and tradersy.

Prem Prakash, who has a hosiery store in Bhajanpura, says the prices of undergarments, socks and stockings, all sourced from China, have gone up by 10-40%.

Three of his six workers have left for Meerut on the day the violence broke out, and he is not sure when they will come back.

“There has been a loss of 20-25%. Our margins have come down significantly,” he said, adding that there has been a steep increase in women’s undergarments -- over 22%.

“Ideally, the government should be incentivising us to manufacture our products here instead of depending on finished products from China. Two years ago, there was so much ‘maal’ from China that our prices were hit. Now, the opposite has happened.”

Owner of ‘Novelty Stores’, Navneet Gupta, said sales during February, the month dedicated to love and romance, when there is a heavy sale of soft toys and gift items, were not good this year. “Some traders who had stocked up extra goods and made a lot of money as others were falling short. But for all the traders, the existing stocks will dry up soon, and if the production in China and the transport of goods from there don’t resume, the coming period will be very tough. In the absence of supplies, we are forced to increase prices, while our margins have drastically come down,” he said.

“There has been a total disruption in the supply chain...For almost four days after the riots broke out not a single customer came to the shop..,” said Vijay Chauhan who has a business of aluminium fabrication in Bhajanpura. “After the riots, most of the labourers went away to their villages... Hence, transport of goods such as glassware is also a challenge..Most of us, after we saw mobs charging at us, have decided to hire private security, which will also cost us significantly.”

India is among the 15 most affected economies due to the coronavirus epidemic and slow down in production in China, with an estimated trade impact of $348 million. According to reports, India’s imports of Chinese goods contracted in February to their lowest levels in nearly four years.