China has capitalized on India's most colorful holiday, dominating the market for Holi-related products despite the Indian government's "Make in India" initiative.

The festival of Holi is a celebration of the end of winter and the anticipation of spring's coming. The holiday takes place during late February or early March, on the day following the full moon in the Hindu month of Phalguna.

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Festivities involve relaxing social barriers constructed by the caste system, giant bonfires, and dancing among clouds of colored powders and water.

The market for colored powder and water accessories is a lucrative one, netting billions of dollars (US) in sales of sprinklers, water guns, balloons and powders. This appears to be an ideal opportunity for Indian prime minister Narendra Modi's plan to pull India closer to matching China as an economic powerhouse.

However, Chinese manufacturers are the ones benefiting the most from sales of Holi products.

According to a survey of around 250 manufacturers, Indian companies lost 75 percent on their Holi products this year as they cannot compete with cheaper Chinese products.

D. S. Rawat, secretary general of the organization that conducted the survey, said, "there is a price differential of over 55 percent between Chinese Holi colors and sprinklers and those made by local manufacturers."

The survey called the Chinese products flooding the market "innovative and fancy," but respondents also accused their competitors of using toxic materials that can cause skin damage.

Indian manufacturers have been facing this problem for years. A 2013 survey quoted one sprinkler manufacturer who said, "for the past five years, the business of local sprinklers is decreasing due to stiff competition with Chinese sprinklers."

Modi's "Make in India" was launched in September 2015. Next year's Holi product numbers could be a strong indicator of the program's progress.

TagsHoli, Chinese manufacturers, India, Holi festival, China-India relations, China manufacturers