Job losses on the cards for the world’s largest exporter of human hair threatened by ‘hair smuggling’

A recent investigation into an alleged hair smuggling operation is being blamed for thousands of job losses in India.

India has long been the world’s leading exporter of high-quality human hair.

With China standing as its largest market, industry insiders have noticed a worrying shift in how the product is procured and exported.

Now an illicit hair trade is being held responsible for the loss of thousands of jobs and poses a threat to India’s competitiveness in a rapidly growing industry.

SMUGGLING RACKET IN INDIA

Earlier this month, the Enforcement Directorate of India revealed its discovery of a hair-smuggling network.

This alleged racket then transports the product from India to countries like Myanmar and Bangladesh before ultimately reaching China.

China is experiencing a growing demand for wigs, extensions and hairpieces.

Local media reports estimate the value of this smuggling racket to be as high as $1.5 billion.

Previously, Chinese companies would purchase the product from its Indian counterparts at $150 to $200 per kilogram.

“Now, increasingly, the Chinese are hiring local agents who buy the hair directly from Indian traders at a quarter of the price,” Sunil Eamani, a member of the Human Hair and Hair Products Manufacturers and Exporters Association of India, told Nikkei Asian Review.

“This has changed the trade dynamics and encouraged smuggling, as unscrupulous players seek to secure supplies at rock-bottom prices and get around taxes.”

In India hair is collected from households and temples, where it is often shaved for religious reasons.

According to Eamani, this hair is increasingly being diverted to smugglers en route to markets in China, the U.S., Europe and the Middle East.

Eamani notes that the illicit trade has hurt legitimate businesses in India in the last few years. This has resulted in the loss of as many as 411 000 jobs across the industry.

STRICTER ENFORCEMENT REQUIRED

Swarnali Ghosh is the co-founder of AWE Hair International – one of India’s leading wig manufacturers.

Ghosh has highlighted the premium value of Indian hair in the global market.

“India has a longstanding tradition of hair donation and a well-established industry, which makes it the world’s leading supplier of human hair,” she said.

Eamani says the Indian government did introduce a new set of regulations in the domestic industry in January 2022. These regulations made it compulsory for stakeholders to get permission or licenses.

However, the latest smuggling probe has shown that stricter enforcement may be needed, Eamani added.